talbros engineering limited · directors of the company w.e.f. 29th april, 2016. afterwards, mrs....

TALBROS ENGINEERING LIMITEDRegd. Office: Plot No. 74-75, Sector 6, Faridabad, Haryana – 121 006

CIN: L74210HR1986PLC033018Phone: 0129-4284300, Fax: 0129-4061541

Email: [email protected], Website: www.talbrosaxles.com

30TH ANNUAL REPORT2015-2016

BOARD OF DIRECTORSMR. TARUN TALWAR (Managing Director)MR. KARTIK TALWAR (Non Independent Non Executive Director)MR. SANJAY SHARMA (Executive Director)

MR. VIJAY KUMAR SHARMA (Executive Director)

MR. SUNIL KUMAR (Independent Director)MS. PRIYANKA KHATTAR (Independent Director)

CHIEF FINANCIAL OFFICERMR. KANWAR PAL PAWAR

COMPANY SECRETARYMR. ANKUSH JINDAL

BANKERSINDUSIND BANK LIMITEDHDFC BANK LIMITEDDBS BANK LTD

AUDITORSM/s RAKESH RAJ & ASSOCIATESCHARTERED ACCOUNTANTSPLOT NO.565, SECTOR-7BFARIDABAD 121006 (HARYANA)

REGISTRAR AND TRANSFER AGENT (RTA)M/s BEETAL FINANCIAL & COMPUTER SERVICES PVT LTD.BEETAL HOUSE, 3rd FLOOR,99, MADANGIR, BEHIND LSC, NEW DELHI - 110062Ph. 011-29961281-282 Fax 011-29961284

REGISTERED OFFICEPLOT NO. 74-75, SECTOR-6FARIDABAD 121006 (HARYANA)

WORKSPLOT NO. 35,36,37,38 & 57, INDL. AREA, HATHIN,DISTT. PALWAL (HARYANA)PLOT NO. 77, SECTOR-68, IMT FARIDABAD. HARYANAPLOT NO. 76, SECTOR-6, FARIDABAD. HARYANA

STOCK EXCHANGEBOMBAY STOCK EXCHANGE LIMITED

CONTENTS

Page No.

Directors’ Report .......................................................... 1

Management Discussion & Analysis Report ..............19

Corporate Governance ..............................................20

Independent Auditors’ Report .................................... 33

Balance Sheet ............................................................ 37

Profit & Loss Account ................................................ 38

Cash Flow Statement ................................................. 39

Notes .......................................................................... 40

1

TALBROS ENGINEERING LIMITED

To The Members,

The Directors have pleasure in presenting 30th AnnualReport on the business and operations of the Companyalongwith the audited Balance Sheet and Statement ofProfit & Loss for the year ended on 31st March 2016.

FINANCIAL RESULTS: ( `̀̀̀̀ in Lacs)

Particulars Year Ended Year Ended31st March, 2016 31st March, 2015

Gross Sales 15,407.52 13,829.10

Less :Excise Duty 1,476.78 1,209.16

Net Sales 13,930.74 12,619.94

Other Income 206.02 260.38

Total Income 14,136.76 12,880.32

Profit before Interest, 1,165.80 1,264.18Depreciation & Tax

Less : Interest 290.74 245.33

Depreciation 354.30 358.90

Profit Before Tax 520.76 659.95

Less :Previous Year adjustments NIL 2.86

Provision for Wealth Tax NIL 0.47

Provision for current 200.00 244.60year income-tax

Provision for Deferred Tax (15.79) (42.86)

Net Profit after tax 336.55 454.88

Add :Balance carried from 2,034.20 1,808.49Profit & Loss A/c

Net profit after tax and 2,370.75 2,263.37adjustments

Dividends

Less : Interim Dividend NIL NIL

Final Dividend (Proposed) NIL 152.30

Dividend Distribution Tax on NIL 31.87Proposed Dividend

Transferred to General Reserve 34.00 45.00

Balance carried to Balance Sheet 2,336.75 2,034.20

EPS (Basic) 13.26 17.92

EPS (Diluted) 13.26 17.92

REVIEW OF OPERATIONS:

The net revenue from operations of the Company standsat ` 13,930.74 Lacs in this financial year ended on 31st

March, 2016 at a growth of around 10.39 % as against` 12,619.94 Lacs for the previous financial year. The netprofit after tax for this year is ` 336.55 Lacs as compared

DIRECTORS’ REPORT

to ` 454.87 Lacs for the previous financial year resulting adecline of 26.00%. This decline in profits is due to the higherinterest burden, due to capex investment and also theincrease in input cost not recoverable from customers in acomparative market. The continuous slide downwards ofsteel prices during the course of year resulted in lowmargins while disposing the higher price inventory. Finally,due to extreme pressure from domestic OEMs, focus gotdiluted from the export segment. With an increase incapacity coming through financial year 2016-17, we canexpect higher focus on exports.

Reserves & Surplus as on 31st March, 2016 will stand at` 3,338.07 Lacs as against the paid-up capital of ̀ 253.83Lacs.

DIVIDEND:

Your Directors does not recommend dividend for thefinancial year 2015-16 keeping in mind the expansionsplanned for better growth of the Company. Land has beenacquired for two new plants. Commercial production in oneplant is expected to start from December, 2016.

TRANSFER TO GENERAL RESERVE:

The Company proposes a transfer of ̀ 34,00,000/- (RupeesThirty Four Lacs) to the general reserves out of the amountavailable for appropriation and an amount of ̀ 3.03 Croresis proposed to be retained in the profit and loss account.

SHARE CAPITAL

The paid up equity capital of the Company as on March31, 2016 was ̀ 253.83 Lacs during the year under review.

TRANSFER TO THE INVESTOR EDUCATION ANDPROTECTION FUND:

In terms of Section 125 of the Companies Act, 2013, nounclaimed dividend in relation to any financial year is duefor remittance to the Investor Education and ProtectionFund established by the Central Government.

INTERNAL CONTROL SYSTEM AND THEIRADEQUACY:

The Company has a proper Internal Control Systemcommensurate with the size, scale and complexity of itsoperations. The Company has appointed M/s HarshitBansal & Associates, Chartered Accountants as InternalAuditors of the Company for financial year 2015-16. Tomaintain the objectivity and independence, the InternalAudit team reports to the Chairman of the Audit Committeeof the Board and to the Managing Director/CEO.

The Internal Audit team monitors and evaluates the efficacyand adequacy of internal control system in the company,

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accounting procedures and policies. Based on the internalaudit report, the Company undertake corrective action intheir respective areas and thereby strengthen the control.

MARKETING AND EXPORT:

The export sales have been declined to ̀ 2,200.92 Lacs infinancial year 2015-16 as against ` 2,870.32 Lacs inprevious year.

RATING:

Your Company has been assigned a rating of BBB+ forLong Term Bank Facilities (Term Loans) of ` 10.80 Croresand rating of BBB+/A2 for Long / Short Term Bank Facilities(Fund Based Limits) availed from Indusind Bank Limitedand DBS Bank Ltd The rating is assigned by CARE (CreditAnalysis & Research Limited).

SUBSIDIARIES:

The Company is not having any subsidiary company.

DIRECTORS:

The Board of Directors consists of executive and non-executive directors including independent directors whohave wide and varied experience in different disciplines ofcorporate functioning.

Mr. Sanjay Sharma, Executive Director is liable to retireby rotation and being eligible offers himself for re-appointment. Your Directors recommend for his re-appointment.

Pursuant to section 203 of the Companies Act, 2013, theKey Managerial Personnel of the Company during the yearare Mr. Tarun Talwar, Managing Director, Mr. Kanwar PalPawar, Chief Financial Officer and Mr. Ankush Jindal,Company Secretary. There has been no change in the keymanagerial personnel during the year.

Further, Mr. Kartik Talwar, Non Executive Non IndependentDirector has resigned from the Directorship effective from29th April, 2016. In order to maintain the proper quorumand in compliance with the Companies Act, 2013 and rulesmade thereunder and SEBI (Listing Regulations), 2015,the Board of Directors has appointed Mrs. Gita Talwar, Mr.Kuldeep Singh Bhalla and Mr. Nitin Agarwal as AdditionalDirectors of the Company w.e.f. 29th April, 2016.

Afterwards, Mrs. Gita Talwar and Mr. Nitin Agarwal havealso resigned from the post of Additional Directors effectivefrom 06th June, 2016 and the Board has accepted the samein Board Meeting held on 07th June, 2016. Also, the Boardhas decided to re-designate Mr. Tarun Talwar fromManaging Director to Chief Executive Officer (CEO) of theCompany effective from 07th June, 2016.

Your Directors recommend to pass necessary resolutionfor appointment of Mr. Kuldeep Singh Bhalla as

Independent Director as set out in the item no. 4 of thenotice of the annual general meeting.

DIRECTORS’ RESPONSIBILITY STATEMENT:

In accordance with the provisions of section 134(5), theBoard confirm and submit the Directors, ResponsibilityStatement:-

(i) that in the preparation of the annual accounts, theapplicable accounting standards have been followedalong with the proper explanation relating to materialdepartures;

(ii) the directors had selected such accounting policiesand applied them consistently and made judgmentsand estimates that were reasonable and prudent soas to give a true and fair view of the state of affairs ofthe company at the end of the financial year and ofthe profit of the company for that period;

(iii) the directors had taken proper and sufficient care forthe maintenance of adequate accounting records forsafeguarding the assets of the company and forpreventing and detecting fraud and other irregularities;

(iv) the Directors had prepared the annual accounts on agoing concern basis;

(v) the Directors had laid down internal financial controlsto be followed by the company and that such internalfinancial controls are adequate and were operatingeffectively; and

(vi) the Directors had devised proper systems to ensurecompliance with the provisions of all applicable lawsand that such systems were adequate and operatingeffectively.

DECLARATION BY INDEPENDENT DIRECTORS:

The Independent directors have submitted their disclosureto the Board that they fulfill all the requirements as to qualifyfor their appointment as an Independent Director underthe provisions of section 149(6) of the Companies Act,2013 and under regulation 25 of SEBI (Listing Obligationsand Disclosure Requirements) Regulations, 2015.

NUMBER OF MEETINGS OF THE BOARD:

The Board met 7 (Seven) times during the financial yearunder review, the details of which are given in the CorporateGovernance Report that forms part of this Annual Report.The intervening gap between any two meetings was withinthe period prescribed under the Companies Act, 2013.

BOARD EVALUATION:

Pursuant to the provisions of Companies Act, 2013 andRegulation 25(3) of SEBI (Listing Obligations & DisclosureRequirements), Regulations, 2015, Independent Directors

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at their meeting without the participation of the Non-Independent Directors and Management, considered /evaluated the Boards’ performance including the chairman.

The Board subsequently evaluated its own performance,the working of its committees (Audit, Nomination andRemuneration and Stakeholders Relationship Committee)and Independent Directors (without participation of therelevant Director).

The criteria for performance evaluation have been detailedin the Corporate Governance Report attached to thisreport.

POLICY OF DIRECTORS’ APPOINTMENT ANDREMUNERATION:

The Company’s policy on director’s appointment andremuneration and other matters pursuant to section 178(3)of the Companies Act, 2013 has been disclosed inCorporate Governance Report, which forms part of thisreport.

CODE OF CONDUCT:

The Board of Directors has approved a code of conductapplicable to the members of the Board, principal executiveofficers, principal financial officers, principal accountingofficers or controllers and all senior management of theCompany. The code has been titled as “Code of Ethics forDesignated Persons”. The same has been posted on thewebsite of the Company www.talbrosaxles.com.

The code lays down as standard procedure for efficientworking of designated employees and to build atransparency between the management and stakeholdersof the Company, compliance with governmental laws, rulesand regulations.

The Designated employees have confirmed the compliancewith the code of conduct.

AUDIT COMMITTEE:

The Audit Committee consists of 3 (Three) Directors withIndependent Director as chairman. During the year fivemeetings of the committee were held. The responsibilityand duties of Audit Committee have been detailed in theCorporate Governance Report.

The Committee has been reconstituted on 07th June, 2016as detailed in Corporate Governance Report.

NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration committee consists of3 (three) Non Executive Directors. During the year 1 (One)meeting has been held. The key areas of Committee havebeen detailed in Corporate Governance Report.

The Committee has been reconstituted on 29th April, 2016

and 07th June, 2016 as detailed in Corporate GovernanceReport.

PARTICULARS OF LOANS, GUARANTEES ANDINVESTMENTS:

The Company has not given any loan or guaranteescovered under the provisions of section 186 of CompaniesAct, 2013. The detail of investments made by the Companyis given in the notes to the financial statements.

RELATED PARTY TRANSACTIONS:

The Company has entered into transactions with a relatedparty for availing job work services. The said party iscovered under the definition of related party as per ListingAgreement. The transactions entered into with the relatedparty during the financial year were on arm’s length basisand were in the ordinary course of business. There are nomaterially significant related party transactions made bythe company with promoters, Directors, Key ManagerialPersonnel or other designated persons which may have apotential conflict with the interest of the Company at large.Information on transaction with related parties pursuantto section 134(3)(h) of Companies Act, 2013 read with rule8(2) of Companies (Accounts) Rules, 2014 are given inform AOC-2 and the same forms part of this report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The policy on Vigil Mechanism/Whistle Blower is hostedon the website of the Company.

The policy inter alia provided direct access to the ViceChairman and CFO of the Company. The Vice Chairmanand CFO can approach and discuss the matter withChairman or Audit Committee as they deem fit.

Your Company affirms that no complaints have beenreceived during the year under review.

STATUTORY AUDITORS:

Comments of the Auditors in their report and the notesforming part of the Balance Sheet are self explanatory andneed no comments. The Auditors can be appointed for twomore years in term of section 139(2) of the CompaniesAct, 2013.

Your directors request the ratification of M/s Rakesh Raj &Associates as Statutory Auditors for Financial Year 2016-17. The Company has received a certificate from theauditors to the effect that their re-appointment if made,would be in accordance with the provisions of section 141of the Companies Act, 2013

You are requested to ratify their appointment as StatutoryAuditors form the conclusion of this Annual GeneralMeeting upto the conclusion of 31st Annual GeneralMeeting.

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SECRETARIAL AUDIT REPORT AND THEAPPOINTMENT OF THE SECRETARIAL AUDITOR:

The Company has appointed M/s Sonal Agarwal &Associates, Company Secretaries to hold the office ofSecretarial Auditors and to conduct the Secretarial Auditand the Secretarial Audit Report for the financial yearended on 31st March, 2016 is being attached with theDirector’s Report as Annexure – B which is self explanatoryand needs no comments.

COST AUDITOR’S AND THEIR REPORT:

Cost Audit is not applicable on the product beingmanufactured by the Company.

INSURANCE AND RISK MANAGEMENT:

The assets of the Company are adequately insured againstthe loss of fire, burglary and other risks which areconsidered necessary by the management and suggestedby the bankers of the Company.

PREVENTION OF INSIDER TRADING:

The SEBI has notified SEBI (Prohibition of insider trading)Regulations, 2015 which came into effect from May 15,2015. Pursuant thereto, the Company has formulated andadopted a new code for prevention of insider trading. Thesame has also been published on the website of theCompany.

The code inter alia contains the formalities / pre clearancerequired for dealing in company’s shares and prohibits thesale or purchase by the Directors and designatedemployees while in possession of the unpublished pricesensitive information and during the closure of tradingwindow. The Board is responsible for implementation ofthe code.

All the directors and designated employees have confirmedcompliance with the code.

DEPOSITS:

The Company has not accepted any deposits from publicduring the year.

CORPORATE GOVERNANCE:

Your Company is committed to good CorporateGovernance Practices and following to the guidelinesprescribed by the SEBI and Stock Exchanges from timeto time. The Company has implemented all of its majorstipulations as applicable to the Company. The Statutory

Auditor’s Certificate dated 05 August, 2016 in accordancewith SEBI (Listing Regulations), 2015 and report onCorporate Governance is annexed to and forming part ofthe Director’s Report.

Mr. Tarun Talwar, Chief Executive Officer and Mr. KanwarPal Pawar, Chief Financial Officer, have given a certificateto the Board as contemplated in Schedule V of SEBI(Listing Regulations), 2015.

CORPORATE SOCIAL RESPONSIBILITY:

The Company is committed to discharging its socialresponsibility as a good corporate citizen. As part of itssocial responsibility, the Company has contributed tovarious NGOs for promoting good education, buildingschools for under privileged childrens, contribution forsoftwares and hardwares required for providing goodknowledge and education to the childrens.

Further, the Company has also contributed to a NGOnamely Shree Sardar Vallabhai Patel Rotary GeneralHospital Trust for promoting health in rural areas wherepeople lack the right guidance for regular health check-ups and proper treatment.

The Company has contributed a major portion of its CSRexpenditure in construction of Orphange house inDehradun.

Also, the Company has taken an initiative to maintain theflora around its Registered Office.

The Board provide a brief outline of the Company’s CSRPolicy including the statement of intent reflecting the ethosof the Company, broad areas of CSR interest and anoverview of activities proposed to be undertaken. The CSRpolicy has been hosted on the website of the Company.

The present Composition of the CSR committee is:

1. Mr. Sanjay Sharma, Executive Director

2. Mr. Vijay Kumar Sharma, Executive Director

3. Mr. Sunil Kumar, Independent Director

The average net profit of the company for last three (3)financial years is ` 6.70 Crores (approx). The thresholdlimit (2%) is ` 13.40 Lacs (approx). The total proposedspending on CSR for year 2015-16 was ` 14.77 Lacs(approx.) including unspent amount of ̀ 1.37 Lacs for year2014-15.

The total amount spent by the Company in year 2015-16is ` 14.80 Lakhs.

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The details of CSR activities / projects undertaken during the financial year under review are as follows:

S. CSR Project/activity Sector in Projects/ Amount Amount Cumulative AmountNo. identified which the Programs outlay spent on expenditure Spent:

project is Local (budget) the project/ upto the Director orcovered area/others project or Program ( `̀̀̀̀ date of through

programs In Lakhs) reporting implementingwise (`̀̀̀̀ period ( `̀̀̀̀ agency (`̀̀̀̀

In Lakhs) In Lakhs) In Lakhs)

1 Promoting Preventive Health Care Healthcare Ankleshwar 2.00 2.00 2.00 2.00(Gujarat)

2 Promoting Education Education New Delhi 3.00 3.00 3.00 3.00

3 Building Construction for Orphans Construction Dehradun 5.00 5.00 5.00 5.00

4 Promoting Education and Education & New Delhi 1.00 1.00 1.00 1.00Health Care Healthcare

5 Protection of Flora & Fauna Flora & Fauna Faridabad 3.80 3.80 3.80 3.80

14.80 14.80 14.80 14.80

* Details of Implementing Agency: Shree Sardar Vallabhai Patel Rotary General Hospital Trust, RBTH Singh MemorialCharitable Hospital Society, Shri Shradhanand Bal Vanita Ashram and Savera Association.

MANAGEMENT DISCUSSION AND ANALYSIS:

A Management discussion and Analysis as required underthe Schedule V of SEBI (Listing Obligations & DisclosureRequirements) Regulations, 2015 is annexed and formingpart of the Directors’ Report.

CONSERVATION OF ENERGY, REASEARCH ANDDEVELOPMENT, TECHNOLOGY ABSORPTION ANDFOREIGN EXCHANGE EARNING AND OUTGO:

The particulars prescribed under section 134(3)(m) ofCompanies Act, 2013 read with rule 8 of Companies(Accounts) Rules, 2014, are enclosed as Annexure – A tothe Board’s Report.

INFORMATION PURSUANT TO SECTION 197(12) READWITH RULE 5 OF THE COMPANIES (APPOINTMENTAND REMUNERATION OF MANAGERIALPERSONNEL) RULES, 2014:

In terms of the provisions of Section 197(12) of theCompanies Act, 2013 read with rule 5(2) and 5(3) of theCompanies (Appointment and Remuneration ofManagerial Personnel) Rules, 2014, none of the employeeof the company has received the remuneration in excessto the limits set out in the rules.

Further, pursuant to the provisions of Section 197(12) ofCompanies Act, 2013 and rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel)Rules, 2014, the disclosures and details as required tobe annexed to the Board’s Report are provided hereunder:

(a) Ratio of remuneration of each director to the median remuneration of employees of the Company

Amount (In `̀̀̀̀)

Name of the Designation Remuneration Ratio to medianDirector paid remuneration

Mr. Tarun Talwar Managing Director 52.56 37.75

Mr. Sanjay Sharma Executive Director 9.26 6.65

Mr. Vijay Kumar Sharma Executive Director 9.18 6.59

Mr. Kartik Talwar Director 0.00 Not Applicable

Mr. Sunil Kumar Independent Director 0.05 Only sitting fees paid

Ms. Priyanka Khattar Independent Director 0.05 Only sitting fees paid

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(b) Percentage increase in remuneration of Directors and KMPsAmount (In `̀̀̀̀)

Name of the Director/KMP Designation Remuneration Remuneration % changefor the year for the year during

ended 2015-16 ended 2015-16 the year

Mr. Tarun Talwar Managing Director 52.56 32.30 62.72

Mr. Sanjay Sharma Executive Director 9.26 8.80 5.23

Mr. Vijay Kumar Sharma Executive Director 9.18 8.72 5.28

Mr. Kartik Talwar Director 0.00 0.00 0.00

Mr. Sunil Kumar Independent Director 0.05 0.05 0.00

Ms. Priyanka Khattar Independent Director 0.05 0.05 0.00

Mr. Ankush Jindal Company Secretary 5.35 4.20* 27.38

Mr. Kanwar Pal Pawar CFO 3.28 3.09 6.15

* Remuneration paid for the period 01st June, 2014 to 31st March, 2015.

(c) The median remuneration of the employees has increasedby 6.76 % in 2015-16 as compared to 2014-15

(d) Number of permanent employees on the rolls of theCompany.

Financial Year No. of Employees

2014-15 192

2015-16 217

These numbers are exclusive of Directors andPresident of the Company.

(e) The Company’s overall turnover has been increasedby 10.39% and keeping in mind the performance ofcompany viz a viz Directors and KMPs, the companyhas incremented their salaries based on the positionand responsibilities allocated to them. The Companyhas paid remuneration in line with the policy adoptedfor payment of remuneration.

(f) Comparison of the remuneration of the key managerialpersonnel against the performance of the Company:

Particulars Amount(In Crores)

Aggregate Remuneration of key 0.80managerial personnel in FY 2015-16

Revenue for the year 2015-16 141.37

Remuneration of KMPs (as a % of revenue) 0.57

Profit Before Tax (PBT) 5.21

Remuneration of KMPs (as a % of PBT) 15.36

(g) Market Capitalization and Price Earning Ratio

Particlulars As on As on31st March, 2016 31st March, 2015

Price Earning Ratio 11.92 3.56

Market Capitalization 40.10 16.19(` In Crores)

Particlulars As on As on31st March, 2016 31st March, 2015

Net worth of theCompany ( ` In Crores) 35.92 32.56

(h) There is no variable component availed by thedirectors during the year.

(i) No employee has received remuneration in excess tothe remuneration paid to Mr. Tarun Talwar, ManagingDirector of the Company during the year.

(j) We affirm that the remuneration paid to Directors, KeyManagerial Personnel’s and employees is as per theremuneration policy of the Company.

CORPORATE GOVERNANCE CERTIFICATE:

The Compliance Certificate from the auditors regardingcompliance of conditions of corporate governance asstipulated in SEBI (Listing Regulations), 2015 has beenannexed to this report.

EXTRACTS OF THE ANNUAL RETURN:

The Extracts of the Annual Return for the year 2015-16being attached with the Directors Report as Annexure - C

ACKNOWLEDGEMENT:

Your Directors wish to place on record their appreciationfor the overwhelming co-operating and assistance receivedfrom the investors, customers, business associates,bankers, vendors, as well as regulatory and governmentalauthorities. Your Directors also thank the employees at alllevels, who, through their dedication, co-operation, supportand smart work, have enabled the Company to achieverapid growth.

For and on behalf of the Board

Sd/-Place: Faridabad Sanjay SharmaDate : 05 August, 2016 Chairman

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Form No. AOC-2(Pursuant to clause (h) of sub-section (3) of Section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies

(Accounts) Rules, 2014)

Form for disclosure of particulars of contracts / arrangements entered into by the Company with related parties referredto in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm length transaction under thirdproviso thereto.

1. Details of contracts or arrangements or transactions not at arm’s length basis:

(a) Name(s) of the related party and nature of relationship: Not Applicable

(b) Nature of contracts/arrangements/transactions: Not Applicable

(c) Duration of the contracts/arrangements/transactions: Not Applicable

(d) Salient terms of the contracts or arrangements or transactions including the value, if any: Not Applicable

(e) Justification for entering into such contracts or arrangements or transactions: Not Applicable

(f) Date(s) of approval by the Board: Not Applicable

(g) Amount paid as advances, if any: Not Applicable

(h) Date on which the special resolution was passed in General Meeting as required under first proviso to section188: Not Applicable

2. Details of contracts or arrangements or transactions at arm’s length basis:

(a) Name(s) of the related party and nature of relationship: Not Applicable

(b) Nature of contracts/arrangements/transactions: Not Applicable

(c) Duration of the contracts/arrangements/transactions: Not Applicable

(d) Salient terms of the contracts or arrangements or transactions including the value, if any: Not Applicable

(e) Date(s) of approval by the Board: Not Applicable

(f) Amount paid as advances, if any: Not Applicable

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ANNEXURE-ACONVERSATION OF ENERGY, TECHNOLOGY, ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

(A) Conservation of Energy:

The Company has created high degree of awarenesson conservation and saving of energy among theworkers, employees including top management of theCompany. The initiatives taken by the company areas under:

- No use of Diesel Generator sets for machinesduring power cut off which results in lessconsumption of diesel.

- The LDO required machineries have beentransferred to electricity in order to conserve theresources.

- CFL and LEDs have been installed in MachineShops to conserve energy.

- The company is using LPG in certain machineriesin order to create a pollution free environmentaround the work area.

- Set up of new upgraded machineries have beenadopted with inverter drives which consequentlywill lead to less electricity consumption.

(B) Technology absorption:

- The 7 inch upsetter purchased in last fiscal hasbeen installed in the factory premises in the

current year for better production growth andquality improvement to meet the customer needs.

- The company has also installed 2 CNCs and 1VMC in premises which results in better productquality and cost reduction.

- The company has not incurred any expenditureon Research & Development activities during theyear under review.

(C) Foreign Exchange Earning and Outgo:

S. Particulars Amount (In `̀̀̀̀)No.

Expenditure1 CIF Value of Plant and 33,97,827

Machinery imported

2 Commission on Export Sales 16,35,038

3 Foreign Travelling 19,18,905

4 Repair & Maintenance 1,52,137(Plant & Machinery)

Total 71,03,907

Earnings1 Value of Exports on FOB Basis 21,40,48,743

Total 21,40,48,743

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ANNEXURE-BSECRETARIAL AUDIT REPORT

For the Financial Year Ended on 31st March, 2016[Pursuant to the section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies

(Appointment and Remuneration Personnel) Rules, 2014

ToThe MembersTalbros Engineering LimitedPlot No. 74-75, Sector 6,Faridabad, Haryana – 121 006

I have conducted the secretarial audit of the complianceof applicable statutory provisions and the adherence togood corporate practices by Talbros Engineering Limited,CIN: L74210HR1986PLC033018 (hereinafter called “theCompany”). Secretarial Audit was conducted in a mannerthat provided me a reasonable basis for evaluating thecorporate conducts/statutory compliances and expressingmy opinion thereon.

Based on my verification of the Company’s books, papers,minute books, forms and returns filed and other recordsmaintained by the company and also the informationprovided by the company, its officers, agents andauthorized representatives dur ing the conduct ofsecretarial audit, I hereby report that in my opinion, theCompany has during the audit period covering the financialyear ended on 31st March, 2016 complied with the statutoryprovisions listed hereunder and also that the Companyhas proper Board-processes and compliance mechanismin place to the extent, in the manner and subject to thereporting made hereinafter:

I have examined the books, papers, minute books, formsand return filed and other records maintained by theCompany for the financial year ended on 31st March, 2016,according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rulesmade thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956(‘SCRA’) and the rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations andBye-Laws framed thereunder;

(iv) Foreign Exchange Management Act, 1999 and therules and regulations made thereunder to the extentof Foreign Direct Investment, Overseas DirectInvestment and External Commercial Borrowings;

(v) The following Regulations and Guidelines prescribedunder the Securities and Exchange Board of IndiaAct, 1992 (‘SEBI Act’):-

(a) The Securities and Exchange Board of India(Listing Obligations and DisclosureRequirements) Regulations, 2015;

(b) The Securities and Exchange Board of India(Substantial Acquisition of Shares and Takeovers)Regulations, 2011;

(c) The Securities and Exchange Board of India(Prohibition of Insider Trading) Regulations, 1992;

(d) The Securities and Exchange Board of India(Issue of Capital and Disclosure Requirements)Regulations, 2009;

(e) The Securities and Exchange Board of India(Employee Stock Option Scheme and EmployeeStock Purchase Scheme) Guidelines, 1999;

(f) The Securities and Exchange Board of India(Issue and Listing of Debt Secur ities)Regulations, 2008;

(g) The Securities and Exchange Board of India(Registrars to an Issue and Share TransferAgents) Regulations, 1993 regarding theCompanies Act and dealing with client;

(h) The Securities and Exchange Board of India(Delisting of Equity Shares) Regulations, 2009;and

(i) The Securities and Exchange Board of India(Buyback of Securities) Regulations, 1998;

(vi) OTHER APPLICABLE ACTS,

(a) Factories Act, 1948

(b) Payment of Wages Act, 1936, and rules madethereunder,

(c) The Minimum Wages Act, 1948, and rules madethereunder,

(d) Employees’ State Insurance Act, 1948, and rulesmade thereunder,

(e) The Employees’ Provident Fund andMiscellaneous Provisions Act, 1952, and rulesmade thereunder,

(f) The Payment of Bonus Act, 1956, and rules madethereunder,

(g) Payment of Gratuity Act, 1972, and rules madethereunder,

10


Based on the reports of the department heads of thepremises located at Faridabad and Hathin, I report thatthe Company has substantially complied with the provisionsof the Acts that are applicable to the Company. Based onthe information, explanations and managementrepresentation, the Company has substantially compliedwith tax laws applicable to the Company.

I have also examined compliance with the applicableclauses of the following:

(i) Secretarial Standards issued by the Institute ofCompany Secretaries of India.

(ii) The Listing Agreement entered into by the Companywith Bombay Stock Exchange Limited.

During the period under review the Company has compliedwith the provisions of the Act, Rules, Regulations,Guidelines, Standards, etc. mentioned above.

I further report that

The Board of Directors of the Company is duly constitutedwith proper balance of Executive Directors, Non-ExecutiveDirectors and Independent Directors. There were noChanges in the composition of the Board of Directors duringthe period under review.

Adequate notice is given to all directors to schedule theBoard Meetings, agenda and detailed notes on agendawere sent in advance, and a system exists for seekingand obtaining further information and clarifications on theagenda items before the meeting and for meaningfulparticipation at the meeting.

Majority decision is carried through while the dissentingmembers, views are captured and recorded as part of theminutes.

I further report that there are adequate systems andprocesses in the Company commensurate with the sizeand operations of the Company to monitor and ensurecompliance with applicable laws, rules, regulations andguidelines.

Sd/-Sonal Agarwal

Practising Company SecretaryPlace: Faridabad M. NO. ACS 33123Date : 05 August, 2016 COP No. 12199

Note: This report is to be read with our letter of even datewhich is annexed as ‘ANNEXURE 1’ and forms an integralpart of this report.

ANNEXURE 1

ToThe Members,TALBROS ENGINEERING LIMITEDPlot No. 74-75, Sector 6,Faridabad, Haryana – 121 006

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibilityof the management of the company. Our responsibilityis to express an opinion on these secretarial recordsbased on our audit.

2. We have followed the audit practices and processesas were appropriate to obtain reasonable assuranceabout the correctness of the contents of theSecretarial records. The verification was done on testbasis to ensure that correct facts are reflected insecretarial records. We believe that the processes andpractices, we followed provide a reasonable basis forour opinion.

3. We have not verif ied the correctness andappropriateness of financial records and Books ofAccounts of the company.

4. Where ever required, we have obtained Managementrepresentations about the compliances of laws, rulesand regulations and happening of events etc.

5. The compliance of the provisions of Corporate andother applicable laws, rules, regulations, standardsis the responsibility of management. Our examinationwas limited to the verification of procedures on testbasis.

6. The Secretarial Audit Report is neither an assuranceas to the future viability of the Company nor of theefficacy or effectiveness with which the managementhas conducted the affairs of the company.

Sd/-Sonal Agarwal

Practising Company SecretaryPlace: Faridabad M. NO. ACS 33123Date : 05 August, 2016 COP No. 12199

11


ANNEXURE-CFORM NO. MGT-9

EXTRACTS OF ANNUAL RETURNAs on the financial year ended on

31st March, 2016[Pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies

(Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILSi) CIN: L74210HR1986PLC033018ii) Registration Date: 09/10/1986iii) Name of the Company: TALBROS ENGINEERING LIMITEDiv) Category / Sub-Category of the Company: Company Limited by Sharesv) Address of the Registered Office and contact details:

Plot No. 74-75, Sector 6, Faridabad, Haryana – 121 006Ph.: 0129-4284300, Fax: 0129-4061541

vi) Whether listed Company: Yesvii) Name, Address and Contact details of Registrar and Transfer Agent:

Beetal Financial & Computer Services Private LimitedBeetal House, 3rd Floor, 99, Madangir, Behind Local Shopping Centre, Near Dada Harsukh Das Mandir, NewDelhi – 110 019, Ph.: 011-29961281, 29961282

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the company shall be stated:-

Sl. Name and Description of main NIC Code of the % to total turnoverNo. products / services Product/ Service of the Company

1 Manufacturing of Axle Shafts 29301 100%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:

S. NAME AND ADDRESS CIN/GLN HOLDING/SUBSIDIARY/ % OF SHARES APPLICABLENO. OF THE COMPANY ASSOCIATE HELD SECTION

1 N.A. N.A. N.A. N.A. N.A.

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i) Category-wise Share Holding

Category of No. of Shares held at the No. of Shares held at % ChangeShareholders beginning of the year the end of the year during the

year

Demat Physical Total % of Total Demat Physical Total % of TotalShares Shares

A. Promoters1) INDIANa) Individual / HUF 18,35,936 Nil 18,35,936 72.33 18,42,936 Nil 18,42,936 72.61 0.28b) Central Govt. Nil Nil Nil Nil Nil Nil Nil Nil Nilc) State Govt. (s) Nil Nil Nil Nil Nil Nil Nil Nil Nild) Bodies Corp. Nil Nil Nil Nil Nil Nil Nil Nil Nile) Banks / FI Nil Nil Nil Nil Nil Nil Nil Nil Nilf) Any Other….. Nil Nil Nil Nil Nil Nil Nil Nil Nil

Sub-total (A) (1):- 18,35,936 Nil 18,35,936 72.33 18,42,936 Nil 18,42,936 72.61 0.28

12



year


2) FOREIGN

a) NRIs – Individuals Nil Nil Nil Nil Nil Nil Nil Nil Nil

b) Other– Individuals Nil Nil Nil Nil Nil Nil Nil Nil Nilc) Bodies Corp. Nil Nil Nil Nil Nil Nil Nil Nil Nil

d) Banks / FI Nil Nil Nil Nil Nil Nil Nil Nil Nil

e) Any Other……. Nil Nil Nil Nil Nil Nil Nil Nil Nil

Sub-total (A) (2):- Nil Nil Nil Nil Nil Nil Nil Nil Nil

Total Shareholdingof Promoter (A)=(A)(1) + (A)(2) 18,35,936 Nil 18,35,936 72.33 18,42,936 Nil 18,42,936 72.61 0.28

B.PUBLIC SHAREHOLDING

1) INSTITUTIONS

a) Mutual Funds 4,043 Nil 4,043 0.16 293 Nil 293 0.01 (0.15)b) Banks / FI 45,715 360 46,075 1.82 Nil 360 360 0.01 (1.81)

c) Central Govt. Nil Nil Nil Nil Nil Nil Nil Nil Nil

d) State Govt. (s) Nil Nil Nil Nil Nil Nil Nil Nil Nil

e) Venture Capital Nil Nil Nil Nil Nil Nil Nil Nil NilFunds

f) Insurance Nil Nil Nil Nil 45,715 Nil 45,715 1.80 1.80Companies

g) FIIs Nil Nil Nil Nil Nil Nil Nil Nil Nil

h) Foreign Venture Nil Nil Nil Nil Nil Nil Nil Nil NilCapital Funds

i) Others (Specify) Nil Nil Nil Nil Nil Nil Nil Nil Nil

Sub-total (B)(1):- 49,758 360 50,118 1.98 46,008 360 46,368 1.82 (0.16)

2) NON-INSTITUTIONS

a) Bodies Corp.i) Indian 7,547 3,075 10,622 0.42 13,549 2,075 15,624 0.62 0.20

ii) Overseas Nil Nil Nil Nil Nil Nil Nil Nil Nil

b) Individuals*

i) Individual 1,80,704 1,83,433 3,64,137 14.35 2,64,297 1,34,716 3,99,013 15.72 1.37shareholdersholding nominalshare capitalupto ` 1 lakh/2 lakh

ii) Individual 30,450 Nil 30,450 1.20 Nil Nil Nil Nil (1.20)shareholdersholding nominalshare capital inexcess of ` 1 lakh/ 2 lakh

13



year


c) Others:

i) Trusts 20 Nil 20 0.00 20 Nil 20 0.00 Nilii) NRI 2,35,024 310 2,35,334 9.27 2,28,718 310 2,29,028 9.02 (0.25)

iii)HUF 11,635 Nil 11,635 0.46 5,192 Nil 5,192 0.20 (0.26)

iv)Clearing Member Nil Nil Nil Nil 71 Nil 71 0.002 0.002

Sub-total (B)(2):- 4,65,380 1,86,818 6,52,198 25.70 5,11,776 1,37,101 6,48,948 25.57 (0.13)

Total PublicShareholding (B)=(B)(1) + (B)(2) 5,15,138 1,87,178 7,02,316 27.67 5,57,855 1,37,461 6,95,316 27.39 (0.28)

C.Shares held by Nil Nil Nil Nil Nil Nil Nil Nil NilCustodian for GDRs& ADRs

Grand Total(A+B+C) 23,51,074 1,87,178 25,38,252 100.00 23,55,005 1,37,461 25,38,252 100.00 Nil

* The figures denominate Shareholders holding shares upto ` 1 lakh for previous year and ` 2 lakh for current year

(ii) Shareholding of Promoters and Promoter Group

Sl. Shareholder’s Name Shareholding at the Shareholding at theNo. beginning of the year end of the year

No. of % of total % of shares No. of % of % of % change inShares shares of pledged/ Shares total shares shareholding

the encumbered shares pledged/ duringCompany to total of the encumbered the year

shares Company to totalshares

1 Mr. Kartik Talwar 20,487 0.81 Nil 20,487 0.81 Nil Nil

2 Mr. Karan Talwar 52,524 2.07 Nil 52,524 2.07 Nil Nil

3 Tarun Talwar (HUF) 78,945 3.11 Nil 78,945 3.11 Nil Nil

4 Rakesh Talwar (HUF) 1,36,207 5.37 Nil 1,36,207 5.37 Nil Nil

5 Mrs. Naini Talwar 1,47,330 5.80 Nil 1,47,330 5.80 Nil Nil

6 Mr. Rakesh Talwar 2,96,317 11.67 Nil 2,96,317 11.67 Nil Nil

7 Mrs. Gita Talwar 5,08,877 20.05 Nil 5,15,877 20.32 Nil 0.27

8 Mr. Rajesh Talwar 5,95,249 23.45 Nil 5,95,249 23.45 Nil Nil

Total 18,35,936 72.33 Nil 18,42,936 72.61 Nil 0.27

14


(v) Change in Promoters’ Shareholding (Please specify, if there is no change)

Sl. Particulars Shareholding at the Cumulative ShareholdingNo. beginning of the year during the year

Mrs. Gita Talwar No. of Shares % of total No. of Shares % of totalshares of the shares of the

Company Company

At the beginning of the year 5,08,877 20.05 5,08,877 20.05

7000 Shares 0.00 5,15,877 20.32purchased

from ashareholder

At the end of the year 5,15,877 20.32

(vi) Shareholding Pattern of top ten shareholders (other than Directors, Promoters and Holders of GDRsand ADRs):

Sl. Shareholding at the Shareholding at the endNo. beginning of the year of the year

For Each of the Top 10 No. of Shares % of total No. of Shares % of totalShareholders shares of the shares of the

Company Company

1 Mr. Sartaj Kumar Sahni 2,32,502 9.160 2,25,502 8.880

2 General Insurance Corporation of India 17,950 0.710 17,950 0.710

3 Mahendra Girdharilal 16,050 0.632 16,050 0.632

4 Tushar Kanti Chopra 14,400 0.567 14,400 0.570

5 Sunita Aggarwal NIL NIL 12,500 0.490

6 United India Insurance Company Limited 9,301 0.366 9,301 0.370

7 The Oriental Insurance Company Limited 7,168 0.282 7,168 0.280

8 Anil Soni 6,983 0.275 6,983 0.280

9 Shailender Soni 6,983 0.275 6,983 0.280

10 Naresh Soni 6,508 0.256 6,508 0.260

(vii) Shareholding of Directors and Key Managerial Personnel:

Sl. Shareholding at the Cumulative ShareholdingNo. beginning of the year during the year

For Each of the Directors and KMP No. of Shares % of total No. of Shares % of totalshares of the shares of the

Company Company

1 Mr. Tarun Talwar – Managing Director

At the beginning of the year Nil Nil Nil Nil

Date wise Increase / Decrease in Nil Nil Nil NilShareholding during the year

At the end of the year Nil Nil

Date wise Increase / Decrease inpromoters Shareholding during the yearspecifying the reasons for increase /decrease (e.g. allotment / transfer /bonus / sweat equity etc.)

15




Company Company

2 Mr. Kartik Talwar –Director

At the beginning of the year 20,487 0.81 20,487 0.81

Nil Nil Nil Nil

At the end of the year Nil Nil 20,487 0.81

3 Mr. Sanjay Sharma –Executive Director


Nil Nil Nil Nil

At the end of the year Nil Nil Nil Nil

4 Mr. Vijay Kumar Sharma –Executive Director


Nil Nil Nil Nil


5 Mr. Sunil Kumar Sharma – Director


Nil Nil Nil Nil


6 Ms. Priyanka Khattar – Director


Nil Nil Nil Nil


Date wise Increase / Decrease inShareholding during the year





16




Company Company

7 Mr. Kanwar Pal Pawar – CFO


Nil Nil Nil Nil


8 Mr. Ankush Jindal – Company Secretary


Nil Nil Nil Nil


V. INDEBTEDNESS (`̀̀̀̀ In Lakhs)

Indebtedness of the Company including interest outstanding / accrued but not due for payment

Secured Loans Unsecured Deposits Totalexcluding deposits Loans Indebtedness

Indebtedness at the beginningof the financial year

i) Principal Amount 948.28 318.85 Nil 1,267.13

ii) Interest due but not paid Nil Nil Nil Nil

iii)Interest accrued but not due 0.37 Nil Nil 0.37

Total (i+ii+iii) 948.65 318.85 Nil 1,267.50

Change in Indebtedness duringthe financial year

• Addition 1,003.27 Nil Nil 1,003.27

• Reduction Nil (33.05) Nil (33.05)

Net Change 1,003.27 (33.05) Nil 970.22

Indebtedness at the end of thefinancial year

i) Principal Amount 1,950.03 285.80 Nil 2,235.83

ii) Interest due but not paid Nil Nil Nil Nil

iii)Interest accrued but not due 1.89 Nil Nil 1.89

Total (i+ii+iii) 1,951.92 285.80 Nil 2,237.72



17


VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager: (`̀̀̀̀ In Lakhs)

Sl. Particulars of Remuneration Name of MD/WTD/Manager TotalNo. Amount

Mr. Tarun Mr. Sanjay Mr. Vijay KumarTalwar - MD Sharma - ED Sharma - ED

1 Gross Salary

a) Salary as per provisions contained insection 17(1) of the Income-tax Act, 1961 51.96 9.26 9.18 70.40

b) Value of perquisites u/s 17(2) of IncomeTax Act, 1961 0.60 Nil Nil 0.60

c) Profits in lieu of salary under section 17(3)of Income Tax Act, 1961 Nil Nil Nil Nil

2. Stock Option Nil Nil Nil Nil

3. Sweat Equity Nil Nil Nil Nil

4. Commission- As % of profit Nil Nil Nil Nil- Others, specify Nil Nil Nil Nil

5. Others:i) Medical Reimbursement Nil 0.24 0.24 0.48ii) Leave Travel Allowance Nil 0.24 0.24 0.48

Total (A) 52.56 9.74 9.66 71.96*

Ceiling as per the Act 71.04

* This amount includes an amount of ̀ 0.96 Lacs paid as Medical Reimbursement and Leave Travel Allowanceto Directors, which shall not be considered as part of their remuneration. Therefore, the net remuneration paidto Directors stands at ̀ 71.00 Lacs which is under the ceiling limit computed as per the provisions of CompaniesAct, 2013.

B. Remuneration to other directors: (Amount in `̀̀̀̀)

Sl. Particulars of Remuneration Name of Directors TotalNo. Amount

Mr. Sunil Kumar Ms. Priyanka Khattar

1. Independent Directors

• Fees for attending board/ committee meetings 5,000 5,000 10,000

• Commission Nil Nil

• Others, please specify Nil Nil

Total (1) 5,000 5,000 10,000

2. Other Non-Executive Directors

• Fees for attending board/ committee meetings Nil Nil Nil

• Commission Nil Nil Nil

• Others, please specify Nil Nil Nil

Total (2) Nil Nil Nil

Total (B) = (1+2) 5,000 5,000 10,000

Total Managerial Remuneration 10,000

Overall Ceiling as per the Act 78.14 Lacs

18


C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD: (Amount in `Lakhs)

Sl. Particulars of Remuneration Key Managerial Personnel TotalNo. Amount

CEO Company CFOSecretary

1. Gross Salary

a) Salary as per provisions contained insection 17(1) of the Income-tax Act, 1961 N.A. 5.05 3.18 8.23

b) Value of perquisites u/s 17(2) of IncomeTax Act, 1961 N.A. Nil Nil Nil

c) Profits in lieu of salary under section 17(3)of Income Tax Act, 1961 N.A. Nil Nil Nil

2. Stock Option N.A. Nil Nil Nil

3. Sweat Equity N.A. Nil Nil Nil

4. Commission N.A.

- As % of profit Nil Nil Nil

- Others, specify Nil Nil Nil

5. Others:

i) Medical Reimbursement N.A. 0.15 0.05 0.20

ii) Leave Travel Allowance N.A. 0.15 0.05 0.20

Total N.A. 5.35 3.28 8.63

VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES:

Type Section of Brief Details of Authority Appeal made,the Companies Description Penalty / [RD / NCLT / if any

Act Punishment / COURT] (give details)Compoundingfees imposed

A. COMPANY

Penalty NIL

Punishment

Compounding

B. DIRECTORS

Penalty NIL

Punishment

Compounding

C. OTHER OFFICERS IN DEFAULT

Penalty NIL

Punishment

Compounding


Sd/-Place:Faridabad Sanjay SharmaDate :05 August, 2016 Chairman

19


Your Directors have pleasure in presenting themanagement discussion and analysis report for the yearended 31st March, 2016

(A) INDUSTRY STRUCTURE AND DEVELOPMENT

Talbros Engineering is engaged in manufacturing ofRear Axle Shafts for the leading automobilecompanies in India and foreign markets. TheCompany’s goal is to be a leader in supply ofautomotive rear axle shafts in the Indian & Overseasmarket to benefit from the growth and to profit fromthe opportunities that exist in this sector. The Companyhas acquired lands in order to enhance its productioncapability to cater the needs of its customers.

(B) OPPORTUNITIES AND THREATS

The Company has a world class manufacturing facilitylocated at Faridabad and Hathin in Haryana and isequipped with latest technology and highly qualifiedengineering team. The Company is planning todiversify its product portfolio and entering into newinternational markets. For the purpose, the Companystarted expanding its hands in manufacturing oftorsion bars, spindles and front axles. In internationalbusiness, our largest market is North America andwe also serve some small customers scattered acrossvarious Central and south American countries.

Besides opportunities, the Company is also facingsome threats which includes shifts in the tastes ofcustomers from SUV segment cars to small ecofriendly cars due to continuous increase in fuel pricesand heavy traffic on roads. The competition is alsorising day by day but installation of excess capacitycan lead to risk of price war.

(C) SEGMENT-WISE OR PRODUCT WISEPERFORMANCE

The Company is operating with mainly one producti.e. Rear Axle Shafts and continues to undertake stepsfor improvement measures.

(D) OUTLOOK

The Company does not foresee any major threats toits growth and market share in the coming years. Theinfrastructure need of the company is also completedby catering a new area for production. The companydoes not foresee any technological obsolescence forits products.

(E) RISKS AND CONCERNS

The Company has its step wise risk management

MANAGEMENT DISCUSSION AND ANALYSIS REPORTsystem which includes identification of risk at differentlevels including internal and external business risks.The risks so identified have been properly assessedand analysed at each level. After that, the correctiveand preventive measures are taken by the Companyto overcome the identified risks.

(F) INTERNAL CONTROL SYSTEM AND THEIRADEQUACY

The Company has an adequate internal controlprocedures commensurate with the size and structureof the Company. The company has also engaged theservices of independent Chartered Accountant tocarry out the internal audit and to identify the properand adequate internal control system and sufficientmeasures are taken to update the internal controlsystem. The system also ensures that all transactionsare appropriately authorised, recorded and reported.

(G) DISCUSSION ON FINANCIAL PERFORMANCEWITH RESPECT TO OPERATIONALPERFORMANCE

Your Company has achieved a sales turnover of` 15,407.52 Lacs in this financial year ended on 31st

March, 2016 as against ` 13,829.10 Lacs in theprevious financial year. Net profit after tax for this yearstands at ` 336.55 Lacs as against ` 454.87 Lacs inprevious year. Exports turnover (F.O.B. Value) for theyear ended on 31st March, 2016 is ̀ 2,140.49 Lacs ascompared to ̀ 2,825.98 Lacs in the previous financialyear.

Keeping in mind the expansion plans, the Board hasnot recommended any dividend for current fiscal year.

(H) MATERIAL DEVELOPMENTS IN HUMANRESOURCES / INDUSTRIAL REALATIONS FRONT,INCLUDING NUMBER OF PEOPLE EMPLOYED

As on March 31, 2016, the Company had 217 numberof permanent employees at its manufacturing plantsand administrative office located at Faridabad andHathin.

The company considers the employee values andensures proper encouragement both morally andfinancially to motivate them. The relationship betweenthe management and employees is remarkable.


Sd/-Place: Faridabad Sanjay SharmaDate : 05 August, 2016 Chairman

20


1. PHILOSOPHY:

The Company’s philosophy on corporate governanceis about commitment to values and ethical businessconduct. It has been developed with a tradition of fairand transparent governance even before they weremandated by legislation. The management anddecision taking of the company is done at three levelsviz a viz Shareholders of the Company, Board ofDirectors of the Company and Sub-committees of theBoard. Your Company has fulfilled all the existingguidelines and has complied with all the applicableRegulations of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements)Regulations, 2015.

2. BOARD OF DIRECTORS:

(a) Composition, Category of Directors and theirdirectorship as on March 31, 2016

The Board of Directors of the Company is dulyconsisted comprising of Three Executive Directors,Two Non Executive Independent Directors and oneNon Executive Non Independent Director as on 31st

March, 2016.

The Chairman of the Board of the Company is NonExecutive Non Independent Director. The ExecutiveDirectors are authorized for conducting the generalbusiness of the Company. The Board of the Directorsmeets at regular intervals and take the decisions asand when required for smooth running of theoperations of the Company. A separate meeting ofindependent directors are also being conducted atregular intervals to evaluate the performance ofexecutive directors.

CORPORATE GOVERNANCE

S. Name of the Director Category No. of Directorships No. ofNo. held in other memberships held

Companies (Public & in Committees ofPvt. Ltd. Companies) other Companies

1 Mr. Tarun Talwar Managing Director Nil Nil(Promoter and Executive)

2 Mr. Kartik Talwar* Non Independent Director 2 (Private Limited) Nil(Non Executive)

3 Mr. Sanjay Sharma Director (Executive) Nil Nil

4 Mr. Vijay Kumar Sharma Director (Executive) Nil Nil

5 Mr. Sunil Kumar Director (Non Executive Nil Niland Independent)

6 Ms. Priyanka Khattar Director (Non Executive Nil Niland Independent)

*Mr. Kartik Talwar has resigned from the post ofDirector effective from 29th April, 2016. Mrs. GitaTalwar occupied the position of Mr. Kartik Talwar asNon Executive Non Independent Director withimmediate effect.

Further, Mr. Nitin Agarwal and Mr. Kuldeep SinghBhalla have been appointed as Independent Directorsw.e.f. 29th April, 2016 in compliance with the provisionsof SEBI (Listing Obligations & DisclosureRequirements) Regulations, 2015, Companies Act,2013 and rules made thereunder.

Afterwards, Mrs. Gita Talwar and Mr. Nitin Agarwalhave given their resignations effective from 06th June,2016 which have been accepted in Board meetingheld on 07th June, 2016.Mr. Tarun Talwar, Managing Director of the Companyhas been re-designated to Chief Executive Officer(CEO) of the Company w.e.f. 07th June, 2016.

21


(b) Attendance of Directors in Board Meetings and Last AGM

S. Name of Board Meetings held during the year and attendance of Directors AttendanceNo. the Director 16.05.2015 27.06.2015 03.08.2015 17.09.2015 29.10.2015 04.01.2016 09.02.2016 in Last AGM

(12.08.2015)

1 Mr. Tarun Talwar No Yes Yes Yes Yes Yes No No

2 Mr. Kartik Talwar Yes Yes Yes Yes Yes Yes Yes Yes

3 Mr. Sanjay Sharma Yes Yes Yes Yes Yes Yes Yes Yes

4 Mr. Vijay Kr. Sharma Yes Yes Yes Yes Yes No Yes Yes

5 Mr. Sunil Kumar Yes Yes No Yes Yes Yes Yes Yes

6 Ms. Priyanka Khattar Yes No Yes Yes Yes Yes Yes Yes

The notice and agenda of each Board Meeting arecirculated to all the directors before the prescribeddates of meeting through the permissible modes. Allmajor agenda items are backed by comprehensivebackground information to enable the board to takeinformed decisions.

The details of Director seeking re-appointment at theensuing Annual General Meeting have been furnishedin the Notice convening the Meeting of theshareholders.

Independent Directors

Your Company has appointed Independent Directorswho are renowned people having exper tise /experience in their respective field / profession. Noneof the Independent Directors are promoters or relatedto promoters of the Company. They do not have anypecuniary relationship with the Company and furtherdo not hold two percent or more of the total votingpower of the Company.

Every independent Director, at the first meeting of theBoard in which he/she participates as a Director andthereafter at the first meeting of the Board in everyfinancial year, gives a declaration that he/she meetsthe criteria of independence as required under section149(7) of the Companies Act, 2013. The Companyhad issued a formal letter of appointment to all theindependent Directors.

All Independent Directors maintain their limits ofdirectorships as required under Regulation 25 of SEBI(Listing Obligations and Disclosure Requirements)Regulations, 2015.

Performance Evaluation of Directors

The Nomination and Remuneration Committee of theBoard laid down the criteria for performance evaluationof all Directors. The performance evaluation has beendone by the entire Board of Directors, except theDirector concerned being evaluated. The criteria for

performance evaluation are as follows:

Role & Accountability- Understanding the nature and role of

independent directors’ position- Undertaking the risks associated with the

business- Application of knowledge for rendering advice to

management for resolution of business issues- Offer constructive challenge to management

strategies and proposals- Active engagement with the management and

attentiveness to progress of decisions taken

Objectivity- Non-partisan appraisal of issues.- Own recommendations given professionally

without tending to majority or popular views

Leadership and Initiative- Heading Board Sub-committees

- Driving any function or identified initiative basedon domain knowledge and experience

Personal Attributes- Commitment to role & fiduciary responsibilities

as a Board member- Attendance and active participation- Proactive, strategic and lateral thinking.

3. DETAILS OF COMMITTEES OF BOARD OFDIRECTORS:

(A) AUDIT COMMITTEE:

(a) Terms of Reference:

As required and mandated under the CompaniesAct, 2013 and rules made thereunder andRegulation 18 of SEBI (Listing Obligations andDisclosure Requirements) Regulations, 2015, theAudit Committee has been constituted by theBoard of Directors. The major roles of AuditCommittee are as follows:

22


(i) Oversight of the Company’s financialreporting process and the disclosure of itsfinancial information to ensure that thefinancial statement is correct, sufficient andcredible;

(ii) Recommendation for appointment,remuneration and terms of appointment ofauditors of the Company;

(iii) Approval of payment to statutory auditorsfor any other services rendered by statutoryauditors;

(iv) Reviewing, with the management, theannual financial statements and auditor’sreport thereon before submission to theBoard for approval, with par ticularsreference to:

a. Matters required to be included in theDirector’s Responsibility Statement tobe included in the Board’s Report interms of clause (c) of sub-section 3 ofSection 134 of Companies Act, 2013.

b. Changes, if any, in accounting policiesand practices and reasons for the same

c. Major accounting entries involvingestimates based on the exercise ofjudgement by management

d. Significant adjustments made in thefinancial statements arising out of auditfindings

e. Compliance with listing and other legalrequirements relating to financialstatements

f. Disclosure of any related par tytransactions

g. Qualifications in the draft audit report

(v) Reviewing, with the management, thequarterly financial statements beforesubmission to the board for approval;

(vi) Reviewing, with the management, thestatement of uses / application of fundsraised through an issue (public issue, rightissue, preferential issue, etc.) thestatement of funds utilized for purposesother than those stated in the offerdocument / prospectus / notice and thereport submitted by the monitoring agencymonitoring the utilisation of proceeds of apublic or right issue, and makingappropriate recommendations to the Boardto take up steps in this matter;

(vii) Review and monitor the auditor’sindependence and performance, andeffectiveness of audit process;

(viii) Approval of any subsequent modificationof transactions of the company withrelated parties;

(ix) Scrutiny of inter-corporate loans andinvestments;

(x) Valuation of undertakings or assets of thecompany, wherever it is necessary;

(xi) Evaluation of internal financial controls andrisk management systems;

(xii) Reviewing, with the management,performance of statutory and internalauditors, adequacy of the internal controlsystems;

(xiii) Reviewing the adequacy of internal auditfunction, if any, including the structure ofinternal audit department, staffing andsenior ity of the official heading thedepartment, reporting structure coverageand frequency of internal audit;

(xiv) Discussion with internal auditors of anysignificant findings and follow up there on;

(xv) Reviewing the findings of any internalinvestigations by the internal auditors intomatters where there is suspected fraud orirregularity or a failure of internal controlsystems of a material nature and reportingthe matter to the board;

(xvi) Discussion with statutory auditors beforethe audit commences, about the nature andscope of audit as well as post-auditdiscussion to ascer tain any area ofconcern;

(xvii) To look into the reasons for substantialdefaults in the payment to the depositors,debenture holders, shareholders (in caseof non-payment of declared dividends) andcreditors;

(xviii) To review the functioning of the WhistleBlower mechanism;

(xix) Approval of appointment of CFO (i.e., thewhole-time Finance Director or any otherperson heading the finance function ordischarging that function) after assessingthe qualif ications, exper ience andbackground, etc. of the candidate;

23


(b) Composition of Audit Committee, Meetingsheld during the year and Attendance ofMembers:

The Audit Committee has been constituted in aBoard Meeting held on 07th August, 2014 in

compliance with the provisions of Section 177 ofCompanies Act, 2013 and rules made thereunderand Regulation 18 of SEBI (Listing Obligationsand Disclosure Requirements) Regulations,2015.

S. Name of Member Designation in Meetings held during the yearNo. Committee and attendance of Members

16.05.2015 27.06.2015 03.08.2015 29.10.2015 09.02.2016

1 Ms. Priyanka Khattar Chairman Yes No Yes Yes Yes

2 Mr. Tarun Talwar Member No Yes Yes Yes No

3 Mr. Sunil Kumar Member Yes Yes No Yes Yes

The committee has been reconstituted w.e.f. 07th

June, 2016 due to re-designation of Mr. TarunTalwar. Mr. Sanjay Sharma, Executive Directorhas been appointed as new member of theCommittee with immediate effect.

(B) NOMINATION AND REMUNERATIONCOMMITTEE:

(a) Terms of Reference:

As required and mandated under the CompaniesAct, 2013 and rules made thereunder andRegulation 19 of SEBI (Listing Obligations andDisclosure Requirements) Regulations, 2015, theNomination and Remuneration Committee hasbeen constituted by the Board of Directors. Themajor roles of Nomination and RemunerationCommittee are as follows:

(i) Formulation of the criteria for determiningqualifications, positive attr ibutes andindependence of a director and recommendto the Board a policy, relating to theremuneration of the directors, keymanagerial personnel and other employees;

(ii) Formulation of criteria for evaluation ofindependent Directors and the Board;

(iii) Devising a policy on Board diversity;

(iv) Identifying persons who are qualified tobecome directors and who may beappointed in senior management inaccordance with the criteria laid down, andrecommend to the Board their appointmentand removal.

(b) Composition of Nomination andRemuneration Committee, Meetings heldduring the year and Attendance of Members:

The Nomination and Remuneration Committeehas been constituted in compliance with theprovisions of Section 178 of Companies Act,2013 and rules made thereunder and Regulation19 of SEBI (Listing Obligations and DisclosureRequirements) Regulations, 2015.

One meeting of Nomination and RemunerationCommittee has been held on 27th June, 2015during the year ended on March 31, 2016.

S. Name of Member Designation in Committee Meetings held during the yearNo. and attendance of Members

27.06.2015

1 Mr. Kartik Talwar* Chairman Yes

2 Mr. Sunil Kumar Member Yes

3 Ms. Priyanka Khattar Member No

*Mr. Kartik Talwar has resigned from the post ofDirector of the Company and Mrs. Gita Talwarhas been appointed as Chairman of theCommittee w.e.f. 29th April, 2016.

Mrs. Gita Talwar has also resigned from the postof Director effective from 06th June, 2016 and Mr.Kuldeep Singh Bhalla has been appointed asChairman of the Committee w.e.f. 07.06.2016

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(c) Remuneration Policy:

The Nomination and Remuneration Committeehas formulated a policy which deals with themanner of selection of Board of Directorsincluding Managing Director and payment of theirremuneration. The criteria of selection andremuneration to be paid are as follows:

Non Executive and Independent DirectorThe Non-Executive Directors shall be selectedand appointed on the basis of high integrity withrelevant expertise and knowledge so as to governthe Board of Directors in the field ofmanufacturing, sales & marketing, finance,taxation, law, governance and generalmanagement.

The independent Directors shall be selected andappointed after considering the independence asprescribed in the provisions of section 149(5) ofCompanies Act, 2013 and rules made thereunderand clause 49 of the Listing Agreement. Theindependent director should be a person ofintegrity and possesses relevant expertise andexperience.

The Committee shall ensure that the candidateidentified for appointment as a Director is notdisqualified for appointment pursuant to theprovisions of Section 164 of Companies Act,2013.

Managing DirectorIn case for the appointment as a ManagingDirector, the Nomination and RemunerationCommittee shall identify the person of integritywho possess r ich exper tise, exper ience,knowledge, qualification and leadership qualitiesrequired for the position and shall take into

consideration, the recommendations, if any,received from the members of the Board. Thecandidate identified shall be recommended to theBoard of Directors and is eligible for appointmentonly after the approval of members of theCompany in general Meeting. The committeeshall also ensure that the candidate identifiedshall fulfil all the conditions and criteria asenvisaged in the relevant clauses and schedulesof Companies Act, 2013 and rules made thereunder.

Remuneration to DirectorsThe independent Directors shall only be entitledto receive the remuneration by way of sitting feesand reimbursement of the actual expensesincurred by them for participation in BoardMeetings. The said remuneration to be paidshould be approved by the Board of Directorsconsidering the overall ceiling limits prescribedunder the Companies Act, 2013 and rules madethere under.

The Managing Director shall be entitled to receivethe remuneration as mutually agreed between themembers of the Board of Directors and ManagingDirector, subject to the approval of members ofthe Company in General Meeting. Theremuneration to be paid shall be within the overalllimits as prescribed under the Companies Act,2013 and rules made there under.

The remuneration of Managing Directorcomprises of salary, allowances, perquisites,amenities and retirement benefits as decided bythe Nomination and Remuneration Committeeand approval of Board of Directors from time totime.

(d) Details of Remuneration paid during the year 31st March, 2016:

S. Name of the Director Designation Remuneration PaidNo. (Amount in `̀̀̀̀ Lakhs)

1 Mr. Tarun Talwar Managing Director 52.56

2 Mr. Sanjay Sharma Executive Director 9.26

3 Mr. Vijay Kumar Sharma Executive Director 9.18

The Company has paid sitting fees of ` 5,000/-each to Mr. Sunil Kumar and Ms. Priyanka Khattarfor all the meetings attended during the year.

(C) STAKEHOLDERS RELATIONSHIP COMMITTEE:

(a) Composition of Stakeholders Relationship

Committee, Meetings held during the year andAttendance of Members:

During the year, the nomenclature of ShareTransfer Committee has been changed toStakeholders Relationship Committee. Themembers of the said committee includes 2

25


Executive Directors and one Non ExecutiveDirector as Chairman of the Committee. Thecommittee is looking after and reviewing theactions for redressal of shareholders andinvestors grievances. The Committee is also

responsible for transfer and transmission ofshares as requested by the shareholders of thecompany from time to time.

During the year ended 31st March, 2016, theStakeholders Relationship Committee met 36times.

S. Name of Member Designation in Committee Attendance of Members inNo. Meetings held during the year

1 Mr. Kartik Talwar Chairman 34

2 Mr. Tarun Talwar Member 33

3 Mr. Sanjay Sharma Member 36

The Committee has been reconstituted on 29th

April, 2016 and 07th June, 2016. Mr. KuldeepSingh Bhalla has been appointed as Chairmanand Ms. Priyanka Khattar as new membereffective from 07th June, 2016.Mr. Ankush Jindal, Company Secretary of theCompany has been appointed as complianceofficer of the Company.

During the year, the Company has received 8complaints from shareholders and investors. Allthe complaints have been resolved on time tothe satisfaction of the complainants.

(D) CORPORATE SOCIAL RESPONSIBILITY(CSR) COMMITTEE

(a) Composition of Corporate SocialResponsibility Committee, Meetings heldduring the year and Attendance of Members:

The Corporate Social Responsibility (CSR)Committee has been constituted pursuant to theprovisions of Section 135 of Companies Act,2013 and rules made thereunder. The Committeehas Two Executive Directors and One NonExecutive and Independent Director as members.The Committee met 2 times during the financialyear ended 31st March, 2016

S. Name of Member Designation in Committee Attendance of Members inNo. Meetings held during the year

16.05.2015 09.02.2016

1 Mr. Tarun Talwar Chairman No No

2 Mr. Sanjay Sharma Member Yes Yes

3 Mr. Sunil Kumar Member Yes Yes

The committee has been reconstituted on 07th

June, 2016. Mr. Vijay Kumar Sharma has beenappointed as new chairman of the committee withimmediate effect.

(b) Terms of Reference:

The Committee is responsible for the followingpurposes:

- formulation and recommendation to theBoard, a Corporate Social Responsibility(CSR) Policy which shall indicate theactivities to be undertaken by the companyas specified in the Companies Act, 2013,its rules and regulations thereof for the timebeing in force;

- recommendation on the amount of

expenditure to be incurred on the variousCSR activities;

- monitoring of the CSR Policy of the companyfrom time to time;

- such other acts and deeds in relation to CSRactivities of the company, as it may deem fitor as may be assigned to it by the Board ofDirectors.

(4) INDEPENDENT DIRECTORS MEETING:

During the year ended 31st March, 2016, theIndependent Directors met on 09th February, 2016,inter alia to review and discuss:

(i) the performance of Non Independent Directorsand the Board of Directors as a whole;

26


(ii) the performance of the Chairman of theCompany, taking into account the views of theExecutive and Non Executive Directors;

(iii) to assess the quality, content and timelines offlow of information between the management and

the Board that is necessary for the Board toeffectively and reasonably perform its duties.

There are 2 (Two) independent Directors in theCompany and both are present in the meeting heldon 09th February, 2016.

(5) GENERAL BODY MEETINGS:

(a) Details of last 3 (Three) Annual General Meetings are as under:

S. Financial Year Date Time VenueNo.

1 2014-15 12.08.2015 11:00 a.m. Hotel Millennium Plus, 67, Neelam Bata Road, Faridabad, Haryana – 121 001

2 2013-14 13.09.2014 11:30 a.m. Hotel Millennium Plus, 67, Neelam Bata Road,Faridabad, Haryana – 121 001

3 2012-13 28.09.2014 11:30 a.m. Hotel Milleneum Plus, 57, Neelam Bata Road,Faridabad, Haryana – 121 001

(b) Special Resolutions passed in past 3 AnnualGeneral Meetings:

(1) No Special Resolution has been passed atAnnual General Meeting of the Companyheld on 28th September, 2013

(2) At Annual General Meeting held on 13th

September, 2014

a) Limits of borrowings under section180(1)(c) of the Companies Act, 2013

b) Adoption of new Articles of Associationof the Company in conformity with theCompanies Act, 2013.

(3) At Annual General Meeting held on 12th

August, 2015

a) Re-appointment of Mr. Tarun Talwar asManaging Director for a period of 5(Five) years commencing from01.10.2015

b) Re-appointment of Mr. Sanjay Sharmaas Executive Director for a period of 5(Five) years commencing from01.10.2015

c) Re-appointment of Mr. Vijay KumarSharma as Executive Director for aperiod of 5 (Five) years commencingfrom 01.10.2015

(c) Postal Ballot:

During the year ended March 31, 2016, theCompany approached the shareholders forpassing Special Resolution pursuant to section

180(1)(a) of the Companies Act, 2013 related toproviding security in connection with theborrowings. The details of postal ballot are asfollows:

Date of Postal Ballot Notice: 27th June, 2015

Voting Period: 07th July, 2015 to 06th August, 2015

Date of declaration of result: 08th August, 2015

Date of Approval: 08th August, 2015

Total No. of Votes Polled: 20,73,354

No. of votes casted in favour & %: 20,73,354(100%)

No. of votes casted against & %: Nil

M/s Sonal Agarwal & Associates, CompanySecretaries were appointed as the scrutinizer forcarrying out the postal ballot process in a fair andtransparent manner.

Procedure for Postal Ballot:

In compliance with sections 108 and 110 and otherapplicable provisions of Companies Act, 2013, readwith related rules, the Company provided electronicvoting (e-voting) facility to all its members. TheCompany engaged the services of CDSL for thepurpose of providing e-voting facility to all its members.The members have the option to vote either byphysical ballot or through e-voting.

The Company dispatched the postal ballot notices andforms along with postage prepaid business replyenvelopes to its members whose names appear onthe register of members as on cut off date. The postalballot notice have been sent to members in electronic

27


form to the email addresses registered with theirdepository par ticipants (in case of electronicshareholding) / the Company’s registrar and sharetransfer agents (in case of physical shareholding). Thecompany also published a notice in the newspaperdeclaring the details of completion of dispatch andother requirements as mandated under the Act andapplicable Rules.

Voting rights were reckoned on the paid up value ofshares registered in the names of the members ason the cut-off date. Members desiring to exercise theirvotes by physical ballot forms were requested to returnthe forms, duly completed and signed, to thescrutinizer on or before the close of the voting period.Members desiring to exercise their votes by electronicmode are requested to vote before the close ofbusiness hours on the last date of e-voting.

The scrutinizer submitted her report to the Chairman,after the completion of scrutiny and, and theconsolidated results of the voting by postal ballot wasannounced by the Chairman. The results are alsodisplayed on the Company website,www.talbrosaxles.com, besides being communicatedto the stock exchange and Registrar and ShareTransfer Agent.

(6) MEANS OF COMMUNICATION:

Your Company has promptly reported all materialinformation, including declaration of financial results,press releases, etc., to the Stock Exchanges wherethe securities of your Company are listed. Suchinformation was, also, simultaneously displayedimmediately on your Company’s website i.e.www.talbrosaxles.com. The quarterly and half-yearly

Financial Results of the Company during the year2015-16 were published in leading newspapers(English & Hindi), viz., Financial Express, MediaDarshan and Naya India.

The “Limited Review” Reports of the Financial Results forthe quarters ended June 30, 2015, September 30,2015 and December 31, 2015 were obtained from theStatutory Auditors of the Company and filed with thestock exchange(s).

To facilitate prompt correspondence with investors/shareholders relating to their queries and grievances,the Company has a dedicated Email-id, viz., [email protected].

As part of its ‘Green Initiatives’, Government has permittedCompanies to provide various documents to itsShareholders in electronic form i.e. through e-mail.Your Company is fully committed towards such aninitiative and has accordingly requested itsShareholders to provide or update their e-mail ids withtheir respective DPs/Company Registrar, as the casemay be, and give their option for receiving documentsin electronic form.

(7) GENERAL SHAREHOLDER INFORMATION:

(a) Forthcoming AGM: Date, time and venue

The 30th Annual General Meeting of the Companywill be held on Friday, 30th September, 2015 at10:00 a.m. at Hotel Millenium Plus, 67, NeelamBata Road, N.I.T., Faridabad, Haryana – 121 001

(b) Financial Year

The Financial year of the Company is from April1st to March 31st every year.

Financial Calendar (Tentative)

For 1st quarter ending 30th June, 2016 First week of August, 2016

For 2nd Quarter / half year ending 30th September, 2016 First week of November, 2016

For 3rd Quarter / nine months ending 31st December, 2016 First week of February, 2017

For 4th Quarter / Year ending 31st March, 2017 Last week of May, 2017

Annual General Meeting for the year ending 31st March, 2017 Last week of September, 2017

(c) Date of Book Closure

The register of members and share transferbooks of the Company shall remain closed fromSaturday, 24th September, 2016 to Friday, 30th

September, 2016 (both days inclusive) for annualclosing.

(d) Dividend Payment Date

The Board of Directors has not declared any

dividend for Financial Year 2015-16.

(e) Listing on Stock Exchanges

The Company’s equity shares are actively tradedon following stock exchanges w.e.f. 04th March,2015:

1. Bombay Stock Exchange Limited (BSE), PhirozeJeejeebhoy Towers, Dalal Street, Mumbai – 400001

28


Annual listing fees for fiscal 2016-17 has beenpaid to the above stock exchange.

(f) Stock Code

The Stock codes allotted to the Company are asfollows:

Name of the Stock Exchange Stock Code (Scrip Code)

Bombay Stock Exchange Limited 538987

(g) Market price Data: High, Low during eachmonth in last financial year

The Company’s equity shares are listed and areavailable for trading on Bombay Stock ExchangeLimited (BSE) w.e.f. 04th March, 2015. The High/Low of Market Price of Company’s equity sharestraded on Bombay Stock Exchange Limited(BSE) during the month of March, 2015 was asfollows:

Month(s)2014-15 BSE Month EndHigh Low BSE Sensex

April 226.95 76.50 27,011.30

May 229.00 158.10 27,828.44

June 219.90 172.20 27,780.83

July 363.00 177.80 28,114.56

August 358.90 241.10 26,283.09

September 262.50 205.10 26,154.83

October 264.00 221.30 26,656.83

November 250.00 191.70 26,145.67

December 249.90 176.00 26,117.54

January 218.00 155.00 24,870.69

February 215.00 156.30 23,002.00

March 189.10 151.20 25,341.86

29


(h) Registrar and Transfer Agents

M/s Beetal Financial & Computer ServicesPrivate Limited, Beetal House, 3rd Floor, 99,Madangir, Behind Local Shopping Centre, NearDada Harsukh Das Mandir, New Delhi – 110 062

(i) Share Transfer System

All physical share transfers are effected within15 days of lodgement, subject to the documentsbeing in order and complete in all respects. The

Board has delegated the authority for approvalof transfer, transmission etc to StakeholdersRelationship Committee comprising of One NonExecutive Director and two Executive Directors.A summary of transfer/transmission of shares soapproved by the Committee is placed before theBoard.

(j) Distribution of Shareholding

(a) On the basis of Category

S. Category of Shareholding Number of No. of shares % ofNo. shareholders held shareholding

1 Resident Individuals & Other 5,688 3,99,013 15.72

2 Promoters 8 18,42,936 72.61

3 Mutual Funds / UTI 1 293 0.01

4 Non Residents 22 2,29,028 9.02

5 Financial Institutions / Banks 3 360 0.01

6 Insurance Companies 5 45,715 1.80

7 Bodies Corporate 84 15,624 0.62

8 Trusts 1 20 0.00

9 Clearing Member 2 71 0.00

10 Hindu Undivided Family 54 5,192 0.20

TOTAL 5,868 25,38,252 100.00

30


(b) On the basis of Shares held

Size of Holdings No. of Share Percentage(%) No. of shares Percentage(%)holders to Total held to Total

Upto 5000 5,846 99.63 3,48,484 13.73

5001 to 10000 9 0.15 60,430 2.38

10001 to 20000 4 0.07 60,900 2.40

20001 to 30000 1 0.02 20,487 0.81

30001 to 40000 0 0.00 0 0.00

40001 to 50000 0 0.00 0 0.00

50001 to 100000 2 0.03 1,31,469 5.18

100001 and Above 6 0.10 19,16,482 75.50

TOTAL 5,868 100.00 25,38,252 100.00

(c) On the basis of ownership

S. Category of Shareholder Number of Total number % of holdingNo. Shareholders of shares

(A) Promoters

1. Indian Individuals(a) Promoters 8 18,42,936 72.61

(B) Public Shareholding

1. Institutions(a) Mutual Funds / UTI 1 293 0.01

(b) Financial Institutions / Banks 3 360 0.01

(c) Insurance Companies 5 45,715 1.80

2. Non-institutions(a) Bodies Corporate 84 15,624 0.62

(b) Individuals 5,688 3,99,013 15.72

(c) Trusts 1 20 0.00

(d) Clearing Member 2 71 0.00

(d) Non Resident Indians 22 2,29,028 9.02

(e) Hindu Undivided Family 54 5,192 0.20

TOTAL 5,868 25,38,252 100.00

(k) Dematerialization of shares and liquidity

As on 31st March, 2016, 94.58% of the total shareholding was held in dematerialized form as per detailsmentioned below:

Particulars No. of holders No. of Shares % of TotalIssued Capital

Physical System 3,366 1,37,461 5.42

NSDL 1,902 22,09,074 87.03

CDSL 600 1,91,717 7.55

Total 5,868 25,38,252 100.00

The Demat ISIN of the Company’s equity shares is INE717E01013.

31


(l) Outstanding GDRs/ADRs/Warrants or anyother convertible instrument

There are no outstanding GDRs/ADRs/Warrantsor any other convertible instrument.

(m) Plant Locations

(a) Registered and Corporate Office:Plot No. 74-75, Sector 6,

Faridabad, Haryana – 121 006

Phone: +91-129-4284300

Fax No.: +91-129-4061541

Email ID: [email protected]

(b) Unit Locations:(i) Plot No. 76, Sector 6, Faridabad, Haryana –

121 006

(ii) Plot No. 35,36,37,38 & 57, Industrial Area,Hathin, Distt. Palwal, Haryana

(iii) Plot No. 77, Sector 68, Faridabad, Haryana

(n) Address for Correspondence

Registered and Corporate Office:

Plot No. 74-75, Sector 6,

Faridabad, Haryana – 121 006

Phone: +91-129-4284300

Fax No.: +91-129-4061541

Email ID: [email protected]

DECLARATION

As provided under clause 49 of the Listing Agreement andSEBI (Listing Regulations), 2015, I hereby declare that allthe Board of Directors and Senior Management Personnelof the Company have affirmed the compliance with theCode of Conduct for the year ended 31st March, 2016.


Sd/-Date : 05 August, 2016 Sanjay SharmaPlace: Faridabad Chairman

32


We, Tarun Talwar, Chief Executive Officer and Kanwar PalPawar, Chief Financial Officer of the Company, TalbrosEngineering Limited, to the best of our knowledge andbelief, certify that:

(1) We have reviewed financial statements and cash flowstatement for the year and that to the best of ourknowledge and belief:-

(i) These statements do not contain any materiallyuntrue statement or omit any material fact orcontain statements that might be misleading;

(ii) These statements together present a true andfair view of the Company’s affairs and are incompliance with existing accounting standards,applicable laws and regulations.

(2) There are, to the best of our knowledge and belief, notransactions entered into by the Company during theyear that are fraudulent, illegal or violative of thecompany’s code of conduct.

(3) We accept responsibility for establishing andmaintaining internal controls for financial reporting andthat have evaluated the effectiveness of internalcontrol systems of the company pertaining to financial

CERTIFICATE OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER OFTHE COMPANY ON CORPORATE GOVERNANCE

[Pursuant to Regulation 17(8) of SEBI (LODR) Regulations, 2015][Pursuant to Regulation 17(8) of SEBI (LODR) Regulations, 2015]

ToThe MembersTalbros Engineering Limited

We have examined the compliance of conditions ofCorporate Governance by Talbros Engineering Limited(“the Company”) for the year ended March 31, 2016stipulated in clause 49 of the Listing Agreement (“ListingAgreement”) of the Company with Stock Exchanges forthe period 1st April, 2015 to 30th November, 2015 and asper the relevant provisions of Securities and ExchangeBoard of India (Listing Obligations and DisclosureRequirements) regulations, 2015 (“Listing Regulations”)as referred to in Regulation 15(2) of Listing Regulationsfor the period 1st December, 2015 to 31st March, 2016.

The compliance of conditions of Corporate Governance isthe responsibility of the Management. Our examination waslimited to the procedures and implementation thereof,adopted by the Company for ensuring compliance with theconditions of Corporate Governance. It is neither an audit

reporting and we have disclosed to the auditors andthe Audit Committee, deficiencies in the design oroperation of such internal controls, if any, of whichwe are aware and the steps we have taken or proposeto take to rectify these deficiencies.

(4) We have indicated to the Auditors and the AuditCommittee:-

(i) Significant changes in internal control overfinancial reporting during the year;

(ii) Significant changes in accounting policies duringthe year and that the same have been disclosedin the notes to financial statements; and

(iii) Instances of significant fraud of which they havebecome aware and the involvement therein, ifany, of the management or an employee havinga significant role in the company’ internal controlsystem over financial reporting.

Sd/- Sd/-Tarun Talwar Kanwar Pal PawarChief Executive Officer Chief Financial Officer

Place: FaridabadDate : 05 August, 2016

AUDITORS’ COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE

nor an expression of an opinion on the financial statementsof the Company.

In our opinion and to the best of our information andaccording to the explanations give to us, we certify thatthe Company has fully complied with all the mandatoryconditions of Corporate Governance as stipulated in abovementioned Listing Agreement / Listing Regulations, asapplicable.

For Rakesh Raj & AssociatesChartered AccountantsFirm Regn. No.: 005145N

Sd/-Ruchi JainPartnerM. No. 099920

Place:FaridabadDate :05 August, 2016

33


INDEPENDENT AUDITORS’ REPORTTo,The Members ofTalbros Engineering LimitedFaridabad (Haryana)

Report on the Financial Statements

We have audited the accompanying financial statementsof TALBROS ENGINEERING LIMITED (the Company),which comprise the Balance Sheet as at 31 March 2016,the Statement of Profit and Loss and the Cash FlowStatement for the year then ended and a summary ofsignificant Accounting policies and other explanatoryinformation.

Management’s Responsibility for the FinancialStatements

The Company’s Board of Directors is responsible for thepreparation of these financial statements stated in Section134(5) of the Companies Act 2013(‘the Act”) with respectto the preparation of these financial statements that give atrue and fair view of the financial position, financialperformance and cash flows of the Company in accordancewith the Accounting principles generally accepted in India,including the accounting standards referred to in section133 of the Act read with rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenanceof adequate accounting records in accordance with theprovisions of Act for safeguarding the assets of theCompany and for preventing and detecting frauds and otherirregularities, selection and application of appropriateaccounting policies, making judgements and estimates thatare reasonable and prudent, and design implementationand maintenance of adequate internal financial controlsthat were operating effectively for ensuring the accuracyand completeness of accounting records relevant to thepreparation and presentation of the financial statementsthat give a true and fair view and are free from materialmisstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on thesefinancial statements based on our audit.

We have taken into account the provisions of the act, theaccounting and auditing standards and matter which arerequired to be included in the audit report under theprovisions of the act and the rules made there under.We conducted our audit in accordance with the Standardson Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free from material misstatement.

An audit involves performing procedures to obtain auditevidence about the amounts and disclosures in the financialstatements. The procedures selected depend on theauditor’s judgment, including the assessment of the risksof the material misstatement of the financial statements,whether due to fraud or error. In making those riskassessments, the auditor considers internal controlrelevant to the Company’s preparation of the financialstatements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on whetherthe Company has in place adequate internal financialcontrol system over financial reporting and the operatingeffectiveness of such controls. An audit also includesevaluating the appropriateness of accounting policies usedand reasonableness of the accounting estimates made bymanagement, as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our auditopinion on the financial statements.

Opinion

In our opinion and to the best of our information andaccording to the explanations given to us, the aforesaidfinancial statements give the information required by theAct in the manner so required and give a true and fair viewin conformity with the accounting principles generallyaccepted in India:

a) In the case of the Balance Sheet, of the state of affairsof the Company as at March 31, 2016;

b) In the case of the Statement of Profit and Loss, of theprofit for the year ended on that date; and

c) In the case of the Cash Flow Statement, of the cashflows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor’s Report)Order, 2016 (“the Order”) issued by the CentralGovernment of India in terms of sub-section (11) ofsection 143 of the Act, we give in the Annexure ‘A’ astatement on the matters specified in paragraphs 3of the Order, to the extent applicable.

2) As required by section 143(3) of the Act, we reportthat:

a) we have sought and obtained all the information andexplanations which to the best of our knowledge andbelief were necessary for the purpose of our audit;

b) in our opinion proper books of account as required bylaw have been kept by the Company so far as appearsfrom our examination of those books;

34


c) the Balance Sheet, Statement of Profit and Loss andthe Cash Flow Statement dealt with by this Reportare in agreement with the books of account;

d) in our opinion, the aforesaid financial statementscomply with the Accounting Standards specified insection 133 of the Act, read with rule 7 of Companies(Accounts) Rules 2014;

e) on the basis of written representations received fromthe directors as on March 31,2016, and taken onrecord by the Board of Directors, none of the directorsis disqualified as on March 31, 2016, from beingappointed as a director in terms Section 164(2) of theAct.

f) With respect to the adequacy of the internal financialcontrols over financial reporting of the company andthe operating effectiveness of such controls, refer toour separate Report in “Annexure B”.

g) With respect to the other matters to be included inthe auditors’ report in accordance with rule 11 of TheCompanies (audit and Auditors) Rules, 2014, in ouropinion, and to the best of our information andaccording to the explanation given to us:

i) The company has disclosed the impact ofpending litigations on its financial position in itsfinancial statements.

ii) The Company did not have any long termcontracts including derivative contracts for whichthere were any material foreseeable losses.

iii) The company is not required to transfer anyamount to the Investor Education and ProtectionFund.

For RAKESH RAJ & ASSOCIATESChartered AccountantsFirm Regn No.005145N

Sd/-Ruchi Jain

Place:Faridabad PartnerDate :18.05.2016 Membership No. 099920

ANNEXURE TO THE AUDITORS’ REPORT

ANNEXURE ‘A’

(As referred in paragraph 1 of Report on other legal andregulatory requirements of our report to the members ofTALBROS ENGINEERING LIMITED on the accounts forthe year ended 31st March 2016)

i) a) The Company has maintained proper recordsshowing full particulars, including quantitativedetails and situation of fixed assets.

b) As explained to us, the fixed assets have beenregular ly verif ied by the management at

reasonable intervals. No material discrepancieshave been noticed on such verification during theyear.

c) Based on the audit procedures performed andaccording to the records of the company, titledeeds of the immovable properties are held withthe company.

ii) As explained to us, the inventory has been regularlyverified during the year and the frequency of suchverification is reasonable. As far as we could ascertainand according to the information and explanationsgiven to us, no material discrepancies were noticedbetween the physical stock and the book records.

iii) As per information and explanations given to us, theCompany has not granted any loans, secured orunsecured to companies, firms, Limited LiabilityPartnerships or other parties covered in the registermaintained under section 189 of the Companies Act2013. Accordingly sub-clauses (a), (b) and (c) of para(iii) of the Order are not applicable to the Company.

iv) In our opinion and according to the information andexplanation given to us, the company has compliedwith the provisions of section 185 and 186 of act, inrespect of loans, investments, guarantees, andsecurity to the extent applicable to it.

v) In our opinion and according to the information andexplanations given to us, the Company has compliedwith the directives issued by the Reserve Bank of Indiaand the provisions of Section 73 to 76 of the Act orany other relevant provisions of the Act and the rulesframed there under with regard to deposits acceptedfrom the public. We have been informed that no orderhas been passed by Company Law Board or NationalCompany Law Tribunal or Reserve Bank of India orany Court or any other Tribunal in this regard.

vi) To the best of our knowledge and as explained, thecompany is not required to maintain cost records asspecified by the Central Government under Section148(1) of the Companies Act 2013. Accordingly, Para(vi) of the order is not applicable to the Company.

vii) (a) The Company has been generally regular indepositing with appropr iate author it iesundisputed statutory dues including ProvidentFund, Investor Education and Protection Fund,Employees’ State Insurance, Income Tax, SalesTax, Service Tax, Wealth Tax, Custom Duty,Excise Duty and Cess and any other materialstatutory dues applicable to it though there hasbeen a slight delay in few cases. According tothe information and explanations given to us noundisputed amounts payable in respect ofstatutory dues were in arrear as at 31st March

35


2016 for a period of more than six months fromthe date they become payable.

(b) According to the information and explanationsgiven to us, there are no dues of Sales Tax,Income Tax, Custom Duty, Wealth Tax, ServiceTax, Excise Duty and Cess, which have not beendeposited on account of any dispute.

viii) Based on our audit procedures and as per theinformation and explanations given by themanagement, we are of the opinion that the companyhas not defaulted in repayment of loans to the bank.The company did not have any outstanding dues /loans in respect of financial institution, governmentor debentures during the year.

ix) We have verified that the end use of money raised bythe public issue is as disclosed in the notes to thefinancial statements. The company did not have anyterms loans outstanding during the year.

x) Based on the audit procedures performed for thepurpose of reporting the true and fair view of thefinancial statements and as per the information andexplanation given by the management, we report thatno fraud on or by the company has been noticed orreported during the year.

xi) In our opinion, the managerial remuneration has beenpaid in accordance with the requisite approvalmandated by the provisions of section 197 read withschedule V to the act.

xii) In our opinion the company is not a chit fund or anidhi / mutual benefit fund / society. Therefore, theprovision of clause 3(xii) of the order are not applicableto the company.

xiii) In our opinion, all the transactions with the relatedparties are in compliance with section 177 and 188 ofact, where applicable, and the details have beendisclosed in the financial statement as required byapplicable accounting standard.

xiv) The company has not made any preferential allotmentor private placement of shares or partly convertibledebentures during the year, therefore reporting underclause 3(xiv) shall not be applicable.

xv) According to the information and explanation givento us and on an overall examination of the financialstatements of the company, we report that thecompany has not entered into any cash transactionswith directors or persons connected with him.

xvi) In our opinion the company is not required to beregistered under section 45-IA of the Reserve Bankof India Act, 1934.


Sd/-Ruchi Jain


Annexure ‘B’

Annexure to the independent auditor’ report of even dateon the Standalone financial Statements of TalbrosEngineering Limited

Report on the Internal financial controls under clause(i) of Sub-section 3 of section 143 of the CompaniesAct, 2013 (“the act”)

We have audited the internal financial controls overfinancial reporting of M/s Talbros Engineering Limited (“thecompany”) as of March 31, 2016 in conjunction with ouraudit of the standalone financial statements of the companyfor the year ended on that date.

Management’s responsibility for internal financialcontrols

The companies’ management is responsible forestablishing and maintaining internal financial controlsbased on the internal control over financial reporting criteriaestablished by the company considering the essentialcomponents of internal controls stated in the guidance Noteon the internal financial controls over Financial Reportingissued by the Institute of Chartered Accountants of India.These responsibilities include the design, implementationand maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly andefficient conduct of its business, including adherence tocompany’s policies, the safeguarding of its assets, theprevention and detection of frauds and errors, the accuracyand completeness of the accounting records, and the timelypreparation of reliable financial information as requiredunder the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on theCompany’s internal financial controls over financialreporting based on our audit. We conducted our audit inaccordance with the guidance notes on Audit of internalfinancial controls over financial reporting (the “GuidanceNote”) and the standards of auditing, issued by ICAI anddeemed to be prescribed under section 143(10) of theCompanies Act, 2013, to the extent applicable to an auditof internal financial controls, both issued by the Instituteof Chartered Accountants of India. Those Standards and

36


the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtainreasonable assurance about whether adequate financialcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain auditevidence about the adequacy of the internal financialcontrols system over financial reporting included obtainingan understanding of internal financial controls over financialreporting included obtaining an understanding of internalfinancial controls over financial reporting, assessing therisk that a material weakness exists, and testing andevaluating the design and operating effectiveness ofinternal controls based on the assessed risk. Theprocedures selected depend on the auditor’s judgement,including the assessment of the risks of materialmisstatements of the financial statements, whether due tofraud or error.

We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our auditopinion on the company’s internal financial controls systemover financial reporting.

Meaning of internal financial controls over financialreporting

A company’s internal financial controls system overfinancial reporting is a process designed to providereasonable assurance regarding the reliability of financialreporting and the preparation of financial statements forthe external purposes in accordance with generallyaccepted accounting principles. A company’s internalfinancial controls system over financial reporting includesthose policies and procedures that

(1) pertain to the maintenance of records that, inreasonable detail, accurately and fairly reflect thetransactions and disposition of the assets of thecompany;

(2) provide reasonable assurance that transactions arerecorded as necessary to permit preparation offinancial statements in accordance with the generally

accepted accounting principles, and that receipts andthe expenditures of the company are being made onlyin accordance with authorisations of management anddirectors of the company;

(3) provide reasonable assurance regarding preventionor timely detection of unauthorised acquisition, use,or disposition of the company’s assets that could havea material effect on the financial statements.

Inherent limitation of internal financial controls overfinancial reporting

Because of the Inherent limitation of internal financialcontrols over financial reporting, including the possibilityof collution or improper management override of controls,material misstatements due to error or fraud may occurand not be detected. Also, projections of any evaluation ofthe internal financial controls over financial reporting tofuture periods are subject to the risk of the internal financialcontrols over financial reporting may become inadequatebecause of changes in conditions, or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the company has, in all material respects,an adequate internal financial controls over financialreporting and such of the internal financial controls overfinancial reporting were operating effectively as at March31, 2016, based on the internal financial controls overfinancial reporting criteria established by the companyconsidering the essential components of internal controlstated in the guidance Note on Audit of the internal financialcontrols over financial reporting issued by the Institute ofChartered Accountant of India.


Sd/-Ruchi Jain


37


BALANCE SHEET AS AT 31ST MARCH, 2016(All Amount in `̀̀̀̀, unless otherwise stated)

Notes As at 31st March, 2016 As at 31st March, 2015------------------------ ------------------------------------------------------------------------ ------------------------------------------------------------------------

`̀̀̀̀ ` ` ` ` ` ` `EQUITY AND LIABILITIES:Shareholders’ FundsEquity Share Capital 3 25,382,520 25,382,520Reserves and Surplus 4 333,806,528 359,189,048 300,181,441 325,563,961

------------------------------------------------------------ ------------------------------------------------------------Non-Current LiabilitiesLong Term Borrowings 5 52,128,682 44,088,625Deferred Tax Liabilities (Net) 6 15,248,917 16,827,942Long Term Provisions 7 2,451,701 69,829,300 2,162,164 63,078,731

------------------------------------------------------------ ------------------------------------------------------------Current LiabilitiesShort Term Borrowings 8 158,151,368 67,741,774Trade Payables 9 87,379,015 87,926,251Other Current Liabilities 10 63,436,521 66,639,808Short Term Provisions 11 22,935,625 331,902,529 44,480,700 266,788,533

------------------------------------------------------------ ------------------------------------------------------------ ------------------------------------------------------------ ------------------------------------------------------------TOTAL 760,920,877 655,431,225

========================= =========================ASSETS:Non-Current AssetsFixed Assets

Tangible Assets 12.1 212,349,007 213,466,502Intangible Assets 12.2 653,472Capital Work in Progress 12.3 50,537,750 24,294,640

Non Current Investments 13 860,000 860,000Long-Term Loans and Advances 14 93,875,302 358,275,531 47,210,070 285,831,212

------------------------------------------------------------ ------------------------------------------------------------Current AssetsInventories 15 155,258,150 127,193,112Trade Receivables 16 166,608,821 152,125,018Cash and Bank Balances 17 7,734,815 10,776,012Short Term Loans and Advances 18 72,525,136 77,422,112Other Current Assets 19 518,424 402,645,346 2,083,759 369,600,013

------------------------------------------------------------ ------------------------------------------------------------ ------------------------------------------------------------ ------------------------------------------------------------TOTAL 760,920,877 655,431,225

========================= =========================Summary of significant accounting policies 2The accompanying notes are an integral part of the financial statements

As per our report of even date For and on behalf of the Board of Directors ofFor Rakesh Raj & Associates TALBROS ENGINEERING LIMITEDChartered AccountantsFirm Regn. No. 005145N

Sd/- Sd/- Sd/-Ruchi Jain Tarun Talwar Sanjay SharmaPartner Managing Director Executive DirectorMembership No: 99920 DIN : 02276634 DIN : 06394774

Sd/- Sd/-Ankush Jindal Kanwar Pal Pawar

Company Secretary Chief Financial OfficerPlace : Faridabad M.No. : A26017Date : 18.05.2016

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STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31ST MARCH, 2016(All Amount in `̀̀̀̀, unless otherwise stated)

Year Ended Year EndedNotes 31st March, 2016 31st March, 2015

------------------------ ------------------------------------------------------------------------ ------------------------------------------------------------------------`̀̀̀̀ ` ` ` ` ` ` `

INCOME

Revenue From Operations (Gross) 20 1,540,751,728 1,382,910,005

Less: Excise Duty 147,678,195 1,393,073,533 120,916,431 1,261,993,574-------------------------------------------------------------- --------------------------------------------------------------

Other Income 21 20,602,779 26,038,427-------------------------------------------------------------------- --------------------------------------------------------------------

Total Revenue 1,413,676,312 1,288,032,001============================= =============================

EXPENSESCost of Raw Material Consumed 22 690,141,150 626,377,009

Changes in Inventories of Finished Goods,Work in Progress and Stock-in-Trade 23 (25,911,429) (15,252,800)

Employee Benefits Expenses 24 125,818,277 108,218,385

Finance Costs 25 29,074,573 24,532,734

Depreciation and Amortization Expense 26 35,429,801 35,890,255

Other Expenses 27 507,048,029 442,271,472-------------------------------------------------------------------- --------------------------------------------------------------------

Total Expenses 1,361,600,401 1,222,037,056============================= =============================

Profit before tax 52,075,911 65,994,945

Tax Expenses:Current Tax 20,000,000 24,460,000Deferred Tax (1,579,025) (4,285,581)Wealth Tax - 46,696Taxes For Earlier Years - 18,420,975 286,404 20,507,519

-------------------------------------------------------------- -------------------------------------------------------------------- -------------------------------------------------------------- --------------------------------------------------------------------Profit for the Year 33,654,936 45,487,426

============================= =============================Earnings per Equity Share (Face Value of `̀̀̀̀ 10/-)Basic and Diluted Restated Earnings Per Share 13.26 17.92

Summary of significant accounting policies 2The accompanying notes are an integral part of the financial statements





39


STATEMENT OF CASH FLOW FOR THE PERIOD ENDED 31ST MARCH, 2016(All Amount in `̀̀̀̀, unless otherwise stated)

As at 31st March, 2016 As at 31st March, 2015------------------------------------------------------------ ----------------------------------------------------------

`̀̀̀̀ `Net Profit before taxation, and extraordinary item 52,075,911 65,994,945Adjustment for:Depreciation 35,429,801 35,890,255Preliminary Expenses W/off - -Interest Paid 29,074,573 24,532,734Loss/(Profit) on Sale of Fixed Assets 170,509 61,795Interest Received (127,449) (1,027,782)

----------------------------------------------------------- -------------------------------------------------------Operating Profit before Working Capital Changes 116,623,345 125,451,947

========================= =======================Adjustments for:-Trade and Other Receivables (14,483,803) 583,177Inventories (28,065,038) (2,845,114)Other Current Assets 6,462,311 (4,452,888)Trade Payables (547,236) 20,655,527Other Current Liabilities 45,661,232 (101,209,650)Increase in Deferred Tax Liability -

----------------------------------------------------------- -------------------------------------------------------CASH GENERATED FROM OPERATIONS: 125,650,811 38,182,999

========================= =======================Interest paid (29,074,573) (24,532,734)

----------------------------------------------------------- -------------------------------------------------------NET CASH FLOW FROM/(USED IN) OPERATING ACTIVITIES (A) 96,576,238 13,650,265

========================= =======================Interest Received 127,449 1,027,782Purchase of Fixed Assets (62,355,513) (50,942,141)Transfer to accumulated DepreciationSale of Fixed Assets 946,267 389,113

----------------------------------------------------------- -------------------------------------------------------NET CASH FLOW FROM/(USED IN) INVESTING ACTIVITIES (B) 61,281,797) (49,525,246)

========================= =======================Proceeds from /(Repayment) of long Term Borrowings 8,329,594 3,077,523Proceeds from Share Capital - -Proceeds from Security Premium - -Proceeds from /(Repayment) of long Term Loans &Advances (46,665,232) (16,435,766)

----------------------------------------------------------- -------------------------------------------------------NET CASH FLOW FROM FINANCING ACTIVITIES (C ) 38,335,638) (13,358,243)

========================= =======================INCREASE IN CASH OR CASH EQUIVALENTS (A+B+C) (3,041,197) (49,233,224)Cash/Cash Equivalents as at 1st April (Opening Balance) 10,776,012 60,009,236Cash/Cash Equivalents as at 31st March (Closing Balance) 7,734,815 10,776,012





40


NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2016

1 CORPORATE INFORMATIONTalbros Engineering Limited (the ‘Company’) is a public company in India and incorporated under the provisions of theCompanies Act, 1956. The company is engaged in manufacturing of Rear Axle Shafts. The company caters to bothinternational and domestic market. The company has its manufacturing plants at Plot No 74-75, Sector-6, Faridabad-121006 and Plot No 35-38 & 57, Industrial Area, Hathin, Palwal.

2 SIGNIFICANT ACCOUNTING POLICIES2.1 BASIS FOR ACCOUNTING

The financial statements are prepared under historical cost convention on accrual basis and in accordance with therequirements of the Companies Act, 2013 and in compliance with the applicable Accounting Standards (AS) referred toin section 133 of Companies Act 2013. The accounting policies, except otherwise stated, have been consistently appliedby the Company.

2.2 USE OF ESTIMATESThe preparation of financial statements is in conformity with the generally accepted accounting principles, which requiresestimates and assumptions to be made that affect the reportable amount of assets and liabilities on the date of financialstatements and the reportable amount of revenue and expenses during the reporting period. Difference between theactual results and estimates are recognized in the year in which the results are known / materialized.

2.3 REVENUE RECOGNITIONa) The company recognises revenues on the sale of products, net of discounts and sales incentives, at the time of

dispatch, which is when risks and rewards of ownership pass to the customer. Sale of product is presented grossof excise duty where applicable , and net of other indirect taxes.

b) Export benefits/incentives are recognized in the profits & loss accounts, when the right to receive credit as perterms of the scheme is established in respect of export goods.

c) Interest income is recognised on accrual basis determined by the amount outstanding and the rate applicable andwhen there is no significant uncertainty as to measurability or collectability exists

2.4 INVENTORIESCost of inventory comprise of cost of purchase, cost of conversion and other costs including manufacturing overheadsincurred in bringing them to their respective present location and condition. Closing inventories have been valued asfollows:

a) Raw Materials, Stores, Spares & Packing Material are valued at lower of cost or net realisable value. Costs ofinventories are determined on First in First out (‘FIFO’) basis in the ordinary course of business.

b) Work-in-Progress and Finished Goods are valued at cost. Cost includes variable and fixed overheads allocated towork in progress and finished goods.

2.5 TANGIBLE ASSETSFixed AssetsFixed assets are stated at cost of acquisition or construction and amount added on revaluation less accumulateddepreciation, amortisation. Cost includes purchase price, taxes and duties, labour cost and other direct costs incurredupto the date the asset is ready for its intended use. Subsequent expenditures related to an item of fixed asset are addedto its book value only if they increase the future benefits from the existing asset beyond its previously assessed standardof performance.

Capital Works-in-ProgressCapital Works-in-Progress is carried at cost, comprising direct cost, related incidental expenses and interest on borrowingsto the extent attributed to them.

2.6 INTANGIBLE ASSETSIntangible assets are recognized as per the criteria specified in Accounting Standard 26 “ Intangible Assets” and recordedat the consideration paid for acquisition, whenever acquired.

41


2.7 DEPRECIATION ON FIXED ASSETSa) Depreciation on all fixed assets is charged on straight line method basis (SLM) over the estimated useful life of the

assets. Useful life of the assets is determined in accordance with schedule II to the Companies Act,2013.b) During the current year, depreciation has been charged on double and triple shift basis, as per actual running of

plants.c) Depreciation is not recorded on capital work in progress until construction and installation are complete and asset

is ready for its intended use.

2.8 PROVISIONS AND CONTINGENCIESProvisions involving substantial degree of estimation in measurement are recognized when there is a present obligationas a result of past events and it is probable that there will be an outflow of resources. Liabilities which are material andwhose future outcome cannot be ascertained with reasonable certainty, are treated as contingent, and disclosed by wayof notes to the accounts. Contingent assets are neither recognized nor disclosed in the Financial statements.

2.9 RESEARCH AND DEVELOPMENT EXPENSEResearch and Development costs (other than cost of fixed asset acquired) are charged as an expense in the year inwhich they are incurred.

2.10 FOREIGN CURRENCY TRANSACTIONSa) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the

transactions.b) Monetary items denominated in foreign currencies at the year end are restated at year end rates.c) Any income or expense on account of exchange difference either on settlement or on restatement is recognized

and reflected separately in the profit & loss accounts.

2.11 INVESTMENTSCurrent investments are stated at lower of cost and fair market value. Long-term investments are valued at their acquisitioncost. The provision for any diminution in the value of long- term investments is made only if such a decline is other thantemporary.

2.12 EMPLOYEE BENEFITSRetirement benefits to employees comprise contribution to Provident Fund, Gratuity and Leave Encashment under thescheme of the company. The company makes yearly contribution to the Provident Fund authorities in accordance withthe provisions of the relevant statute. The contributions to the provident fund are charged to the statement of profit andloss for the year.

a) GratuityGratuity is a defined benefit obligation. The liability is provided for on the basis of acturial valuation made at theend of each financial year. Valuation is done on “ Projected Unit Credit Method “. Gratuity is administered by a trustformed for this purpose through the Group Gratuity with Life Incorporation of India.

b) Leave encashmentLeave Encashment liability, being a retirement benefit, is accounted for on actuarial valuation basis.

2.13 BORROWING COSTSBorrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of thecost of Assets. Qualifying Asset is one that necessarily takes substantial period of time to get ready for intended use. Allother borrowing costs are treated as period cost and charged to the profit and loss account in the year in which it wasincurred.

2.14 LEASESAssets taken on lease under which all risks and rewards of ownership are effectively retained by the lessor are classifiedas operating lease. Operating lease payments are recognised as expense in the profit and loss account on a straight linebasis over the lease term.

2.15 CASH FLOW STATEMENTCash Flows are reported using the indirect method, whereby a profit before tax is adjusted for the effects of transactionsof non cash nature and any deferrals or accruals of past or future cash payments or receipts. The cash flows fromoperating, financing and investing activities of the company are segregated.

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2.16 TAXATIONa) Provision for Taxation is ascertained on the basis of assessable profit computed in accordance with the provisions

of Income Tax Act, 1961.

b) Minimum Alternate Tax credit is recognized, as an asset only when and to the extent there is convincing evidencethat the Company will pay normal income tax during the specified period. In the year in which the MAT creditbecomes eligible to be recognized as an asset in accordance with the recommendations contained in guidancenote issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to theProfit and Loss Account and shown as MAT Credit Entitlement under Loans & Advances. The Company reviewsthe same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extentthere is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specifiedperiod.

c) Deferred Tax is recognized, subject to the consideration of prudence, as the tax effect of timing difference betweenthe taxable income & accounting income computed for the current accounting year and reversal of earlier years’timing difference.

Deferred Tax Assets are recognized and carried forward to the extent that there is a reasonable certainty, except arisingfrom unabsorbed depreciation and carry forward losses, which are recognized to the extent that there is virtual certainty,that sufficient future taxable income will be available against which such deferred tax assets can be realized.

2.17 IMPAIRMENT OF ASSETSAt the end of each year the company determines whether a provision should be made for impairment loss on fixedassets by considering the indications that on impairment loss may have occurred in accordance with the accountingstandard 28 on impairment of assets issued by the Institute of Chartered Accountants of India. An impairment loss ischarged to statement of profit and loss in the year in which asset is identified as impaired when the carrying value of theasset exceeds its recoverable value. The impairment loss recognized in prior accounting periods is reversed if there hasbeen a change in the estimate of recoverable amount.

2.18 SHARE ISSUE EXPENSESShare issue expenses are adjusted from Securities Premium Account at the time of issue of respective shares asprescribed under the provisions of company Act.

2.19 EARNING PER SHAREEarning Per Share (EPS) is calculated by dividing the Net Profit or Loss for the period attributable to equity shareholdersby the Weighted Average Number of equity shares outstanding during the period determined as per Accounting Standard.

For the purpose of calculating Diluted Earning Per share, the Net Profit or Loss for the period attributable to equityshareholders is divided by the Weighted Average Number of shares outstanding during the period determined as perAccounting Standard after adjusting for the effects of all dilutive potential equity shares.

As at 31st March, 2016 As at 31st March, 2015`̀̀̀̀ `

3. EQUITY SHARE CAPITAL

3.1 AUTHORISED SHARE CAPITAL30,00,000 Equity Shares of ` 10/- each 30,000,000 30,000,000

3.2 ISSUED, SUBSCRIBED AND FULLY PAID UP CAPITAL25,38,252 (P.Y.25,38,252) Equity Shares of ` 10/- each fully paid up 25,382,520 25,382,520Total Issued, Subscribed and fully paid up capital 25,382,520 25,382,520

3.3 RECONCILIATION OF THE SHARES OUTSTANDING AT THE No. of Shares as at No. of Shares as atBEGINNING AND THE END OF THE REPORTING PERIOD 31st March, 2016 31st March, 2015Equity sharesAt the beginning of the year 2,538,252 2,538,252Add: Right Shares issued during the year - -Add: Bonus shares issued during the year - -Less: Shares forfeited, etc - -Outstanding at the end of the year 2,538,252 2,538,252

43



3.4 TERMS/ RIGHTS AND RESTRICTIONS ATTACHED TO EQUITY SHARESThe company has only one class of equity shares having par value of INR ` 10/- per share. Each holder of equity shareis entitled to one vote per share. The company declares and pays dividend in Indian rupees. The dividend proposed by theBoard of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event ofliquidation of the company, the holders of equity shares will be entitled to receive assets of the company, after distributionof all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.During the year ended 31st March 2016, the amount of dividend per share recognised as distribution to equity holderswas INR NIL (P.Y. INR 6.00). The total dividend appropriation for the year ended 31st March 2016 amounts to INR NIL(P.Y. INR 1,52,29,512/- ) excluding Dividend Distribution Tax of INR NIL (P.Y. INR 31,86,750/- )

3.5 DETAILS OF SHAREHOLDERS HOLDING MORE THAN 5% SHARES IN THE COMPANY

As at 31st March, 2016 As at 31st March, 2015No. of Shares % No. of Shares %

Rajesh Talwar 595,249 23.45 595,249 23.45Gita Talwar 515,877 20.32 508,877 20.05Rakesh Talwar 296,317 11.67 296,317 11.67Naini Talwar 147,330 5.80 147,330 5.80Sartaj K Sahni 232,502 9.16 232,502 9.16Rakesh Talwar (HUF) 136,207 5.37 136,207 5.37

As per the records of the company, including its register of shareholders / members and other declarations received fromthe shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership ofshares


4. RESERVES AND SURPLUS

4.1 CAPITAL RESERVEAs per last balance sheet 17,487,403 17487403Add/less: adjustment during the year - -

-------------------------------------- --------------------------------------Closing balance 17487403 17487403

4.2 SECURITIES PREMIUM ACCOUNTAs per last balance sheet 43,319,713 - 43,319,713 -Add: Security premium raised during the year - - -Less: Right Issue expenses W/o - - -

-------------------------------------- --------------------------------------Closing balance 43,319,713 43,319,713

4.3 REVALUATION RESERVERevaluation Reserve 999,813 1,029,662Less: Transferred to Profit & Loss A/c (29,849) (29,849)

-------------------------------------- --------------------------------------Closing balance 969,964 999,813

4.4 GENERAL RESERVEAs per last balance sheet 27,324,826 25,260,000Add/less: adjustment during the year 3,400,000 4,500,000Less: Transferred to accumulated depreciation - 2,435,173

-------------------------------------- --------------------------------------Closing balance 30,724,826 27,324,827

4.5 OTHER RESERVES : CAPITAL SUBSIDYAs per last balance sheet 7,629,905 7,629,905Add/less: adjustment during the year - -

-------------------------------------- -------------------------------------- -------------------------------------- --------------------------------------Closing balance 7,629,905 7,629,905

========================== ==========================

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4.6 SURPLUS / (DEFICIT) IN THE STATEMENT OF PROFIT AND LOSSAs per last balance sheet 203,419,781 180,848,616

Profit for the year 33,654,936 45,487,426

Less: Appropriations

Transfer to General reserve 3,400,000 4,500,000

Dividend proposed on equity shares - 15,229,512

Dividend distribution tax on proposed dividend - 3,186,750----------------------------------------- -----------------------------------------

Closing balance 233,674,717 203,419,780----------------------------------------- -----------------------------------------

TOTAL 333,806,528 300,181,441============================ ============================

5 LONG TERM BORROWINGS

SECURED BORROWINGSTerm loans

From banks 23,176,203 11,108,195From others 372,479 1,095,430

------------------------------------------ ------------------------------------------Total secured long term borrowings (I) 23,548,682 12,203,625

UNSECURED BORROWINGSDeposits - -Loans and advances from related parties 28,580,000 31,885,000

------------------------------------------ ------------------------------------------Total unsecured long term borrowings (II) 28,580,000 31,885,000

----------------------------------------- -----------------------------------------Total Long Term Borrowings (I+II) 52,128,682 44,088,625

============================ ============================

5.1 The requisite particulars in respect of secured long term borrowings are as under :

Particulars of loan /security/ guarantee Terms of As at 31 st March, 2016 As at 31 st March, 2015Repayment `̀̀̀̀ `

1 TERM LOANS FROM BANKSTerm Loans from IndusInd Bank Limited Quarterly payment ClosingBalance Closing Balanceare secured by First parri-passu charge of equated quarterly INR 0 INR 20,925,000on all present and future moveable and Installmentsimmovable fixed assets of the company beginning from CurrentMaturity Current Maturityviz. Plot no. 74-75, Faridabad and Plot the Year of taking INR 0 INR 11,925,000no. 35-38, Hathin Palwal, and further the loansecured by hypothecation of current Non-Current Maturity Non-Current Maturityassets both present and future. The Term INR 0 INR 9,000,000Loans are further secured by personalguarantees of President and ManagingDirector of the company. The rate ofInterest is at the rate of 12.00% p.a.

45



Particulars of loan /security/ guarantee Terms of As at 31 st March, 2016 As at 31 st March, 2015Repayment `̀̀̀̀ `

2 Term Loans from HDFC Bank Limited are Monthly payment Closing Balance Closing Balancesecured by First parri-passu charge by of equated quarterly INR 20,697,153 INR 0way of hypothecation of the Company’s Installments beginningassets, both present and future, and from the month of Current Maturity Current Maturityfurther secured by equitable mortgage disbursement. INR 3,638,016 INR 0on Plot no. 74-75, Sector-6, Faridabad,Plot No. 35-38, Hathin and Plot No. 77, Non-Current Maturity Non-Current MaturitySector -68, Faridabad. The Term Loans INR 17,059,137 INR 0are further secured by personal guaranteesof President and Managing Director of thecompany. The rate of Interest is at the rateof 10.30% p.a.

3 Term Loans from DBS Bank Ltd are Quarterly payment Closing Balance Closing Balancesecured by First parri-passu charge on all of equated quarterly INR 9,000,000 INR 0present and future moveable and immovable Installments beginningfixed assets of the company viz. Plot no. from the Year of Current Maturity Current Maturity74-75, Faridabad and Plot no. 35-38, Hathin taking the loan INR 6,000,000 INR 0Palwal, and further secured by hypothecationof current assets both present and future. Non-Current Maturity Non-Current MaturityThe Term Loans are further secured by INR 3,000,000 INR 0personal guarantees of President andManaging Director of the company. Therate of Interest is at the rate of 10.25% p.a.

4 VEHICLE LOANS FROM BANKS Monthly payment Closing Balance Closing BalanceVehicles Loans are secured against of equated Monthly INR 6,060,437 INR 3,815,636Hypothecation of Vehicles. The rate of InstallmentsInterest is at the rate of 8.50% p.a to beginning from Current Maturity Current Maturity12.08% p.a. the Year of INR 2,943,371 INR 1,707,441

taking the loanNon-Current Maturity Non-Current Maturity

INR 3,117,066 INR 2,108,195

5 VEHICLE LOANS FROM NBFC’S Monthly payment Closing Balance Closing BalanceVehicles Loans are secured against of equated Monthly INR 1,095,430 INR 2,345,181Hypothecation of Vehicles. The rate of InstallmentsInterest is at the rate of 8.50% p.a to beginning from Current Maturity Current Maturity12.08% p.a. the Year of INR 722,951 INR 1,249,751

taking the loanNon-Current Maturity Non-Current Maturity

INR 372,479 INR 1,095,430


6. DEFERRED TAX LIABILITY AS PER AS-22Fixed Assets 16,251,828 17,703,291Disallowance u/s 43 B (1,002,911) (875,349)

------------------------------------- ------------------------------------- ------------------------------------- -------------------------------------Deferred Tax Liability (Net) 15,248,917 16,827,942

========================= ==========================7 LONG TERM PROVISION

Annual Leave Payable 2,451,701 2,162,164------------------------------------- ------------------------------------- ------------------------------------- -------------------------------------

Total Long Term Provision 2,451,701 2,162,164========================= ==========================

46


NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 20168. SHORT TERM BORROWINGS

SECUREDWorking Capital Loans From Banks *

IndusInd Bank Ltd 47,824,384 67,741,774HDFC Bank Ltd 60,154,040 -DBS Bank Ltd 50,172,944 -

------------------------------------- ------------------------------------- ------------------------------------- -------------------------------------Total Short Term Borrowings 158,151,368 67,741,774

========================= ==========================*The working capital facilities from banks are secured by way of hypothecation of stock in trade and book debts andfurther secured by way of a second charge on immovable properties of the company. The facilities of working capital frombanks are further secured by personal guarantees of President and Managing Director of the company.

9. TRADE PAYABLESDues to MSME * - -Dues of other than MSME 87,379,015 87,926,251

------------------------------------- ------------------------------------- ------------------------------------- -------------------------------------Total Trade Payables 87,379,015 87,926,251

========================= ==========================* The above information as required to be disclosed under Micro, Small and Medium Enterprises Development Act, 2006has been determined to the extent such parties have been identified on the basis of information available with theCompany. Further no interest has been paid during the year and payable as on 31st March 2016 as well as 31st March2015 to such parties.

10. OTHER CURRENT LIABILITIESCurrent Maturities of Long Term Debt 13,304,337 14,882,192Interest accrued and due on Borrowings - -Interest accrued but not due on borrowings 188,694 36,750Advance from Customers 278,390 2,399,718Creditors for Expenses 26,572,499 28,328,522Creditors for Capital Expenditure 362,290 638,262Unpaid Dividends 949,040 564,117Other Liabilities:-

Accrued Salary & Benefits 1,090,889 3,545,603Statutory Dues payable 1,843,212 1,478,674TDS payable 1,207,576 1,446,180Security Job Contractors 2,961,121 2,951,121Other payables 14,678,473 10,368,669

--------------------------------------- --------------------------------------- --------------------------------------- ---------------------------------------Total Current Liabilities 63,436,521 66,639,808

=========================== ===========================

11. SHORT TERM PROVISIONSProvision for Income Tax 20,000,000 24,460,000Proposed Equity Dividend - 15,229,512Provision for Wealth Tax - 46,696Provision for Tax on Proposed Equity Dividend - 3,186,750Provision for Employee Benefits 2,935,625 1,557,742

--------------------------------------- --------------------------------------- --------------------------------------- ---------------------------------------Total Short Term Provisions 22,935,625 44,480,700

=========================== ===========================

12. FIXED ASSETSTangible assets 212,349,007 213,466,502Intangible assets 653,472 -Capital work in progress 50,537,750 24,294,640

--------------------------------------- --------------------------------------- --------------------------------------- ---------------------------------------Total Fixed Assets 263,540,229 237,761,142

=========================== ===========================

47


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13 NON -CURRENT INVESTMENTSUNQUOTED NON TRADE EQUITY INSTRUMENTS(AT COST)Investments in equity instruments 860,000 860,000

Talbros Cork Products Private Limited(33000 fully paid up Equity Shares of ` 10/- each)

--------------------------------------- --------------------------------------- --------------------------------------- ---------------------------------------Total Non-Current Investments 860,000 860,000

=========================== ===========================

14 LONG TERMS LOANS AND ADVANCESUNSECURED, CONSIDERED GOODCapital Advances 69,368,745 42,581,796Security Deposits 24,506,557 4,628,274

--------------------------------------- --------------------------------------- --------------------------------------- ---------------------------------------Total Long Term Loans and Advances 93,875,302 47,210,070

=========================== ===========================

15 INVENTORIES(Taken, Valued and Certified by the Management)

Raw Materials 18,884,873 19,931,264Work-in-Progress 125,715,500 99,763,718Finished Goods 803,146 1,151,841Stores, Spares and Loose Tools 8,472,194 5,272,194Scrap 1,323,103 1,014,761Others(Packing Materials) 59,334 59,334

--------------------------------------- --------------------------------------- --------------------------------------- ---------------------------------------Total Inventories 155,258,150 127,193,112

=========================== ===========================

16 TRADE RECEIVABLESUnsecured, Considered Good

Outstanding for a period exceeding 6 months fromthe date they are due for payment 1,894,016 3,519,040

Others 164,714,805 148,605,978--------------------------------------- --------------------------------------- --------------------------------------- ---------------------------------------

Total Trade Receivables 166,608,821 152,125,018=========================== ===========================

17 CASH AND BANK BALANCESCASH AND CASH EQUIVALENTSCash in hand 406,527 163,115Balances with banks

In current accounts 6,339,248 2,932,512In dividend accounts 949,040 7,694,815 564,117 3,659,744

--------------------------------------- ---------------------------------------OTHER BANK BALANCES

Fixed Deposit with Bank (Current Maturity) - 6,478,311Margin Money with Bank 40,000 40,000 637,957 7,116,268

--------------------------------------- --------------------------------------- --------------------------------------- ---------------------------------------Total Cash and Bank Balances 7,734,815 10,776,012

=========================== ===========================

49




18 SHORT TERM LOANS AND ADVANCESUnsecured, Considered Good

Advance Recoverable in Cash or in Kind 766,635 490,635Loans to Employees 849,511 645,261Advance to Suppliers 10,058,634 2,805,835

Balances with Statutory/Government Authorities:-Excise Duty Balance 16,942,596 20,378,494Income Tax Advance 3,896,947 3,849,167Sales Tax Advance 20,364,166 26,792,853

Other Short Term Loans and Advances:-Advance Income Tax 18,833,830 21,579,694Prepaid Expenses 812,817 880,173

--------------------------------------- --------------------------------------- --------------------------------------- ---------------------------------------Total Short Term Loans and Advances 72,525,136 77,422,112

=========================== ===========================

19 OTHER CURRENT ASSETSDuty Drawback Receivable 518,424 2,083,759

--------------------------------------- --------------------------------------- --------------------------------------- ---------------------------------------Total Other Current Assets 518,424 2,083,759

=========================== ===========================

For the Year Ended For the Year Ended31st March, 2016 31st March, 2015

`̀̀̀̀ `20 REVENUE FROM OPERATIONS

SALE OF PRODUCTSDomestic Sales 1,294,396,553 1,079,875,398Export Sales 220,091,963 287,032,071

------------------------------------------- -------------------------------------------1,514,488,516 1,366,907,469

OTHER OPERATING REVENUES 26,263,212 16,002,536------------------------------------------- -------------------------------------------

Total Revenue From Operations 1,540,751,728 1,382,910,005============================= =============================

21 OTHER INCOMEInterest Income 127,449 1,027,782Discount Received 12,416,128 17,482,876Duty Drawback Received 4,453,536 5,334,281Foreign Exchange Fluctuation 2,410,065 1,920,668Liabilities written back to the extent not required 694,234 269,220Other non-operating income (Misc.Income) 501,367 3,600

--------------------------------------- --------------------------------------- --------------------------------------- ---------------------------------------Total Other Income 20,602,779 26,038,427

=========================== ===========================

50




`̀̀̀̀ `22 COST OF RAW MATERIAL CONSUMED

Opening Stock 19,931,264 29,670,012Purchases 688,351,495 615,144,847Cartage Inward 743,264 1,493,414

--------------------------------------- --------------------------------------- --------------------------------------- ---------------------------------------709,026,023 646,308,273

Closing Stock (18,884,873) (19,931,264)--------------------------------------- ---------------------------------------

Total Cost of Raw Material Consumed 690,141,150 626,377,009=========================== ===========================

23 CHANGES IN INVENTORIES OF FINISHED GOOD,W.I.P. AND STOCK IN TRADE

CLOSING STOCKFinished Goods 803,146 1,151,841Work-in-progress 125,715,500 99,763,718Scrap 1,323,103 1,014,761

--------------------------------------- ---------------------------------------127,841,749 101,930,320

OPENING STOCKFinished Goods 1,151,841 122,469Work-in-progress 99,763,718 84,147,626Scrap 1,014,761 2,407,425

--------------------------------------- ---------------------------------------101,930,320 86,677,520--------------------------------------- ---------------------------------------

(Increase) / Decrease In Stock (25,911,429) (15,252,800)=========================== ===========================

24 EMPLOYEE BENEFITS EXPENSESalaries and Wages 94,029,686 82,389,773Contribution to Provident and other Funds 4,421,016 3,954,762Director’s Remuneration 7,099,896 4,982,144Gratuity 732,862 778,628Staff Welfare Expenses 19,534,817 16,113,078

--------------------------------------- --------------------------------------- --------------------------------------- ---------------------------------------Total Employee Benefits Expense 125,818,277 108,218,385

=========================== ===========================

25 FINANCE COSTInterest Expense 17,833,503 16,353,327Other Borrowing Cost 11,241,070 8,179,407

--------------------------------------- --------------------------------------- --------------------------------------- ---------------------------------------Total Finance Cost 29,074,573 24,532,734

=========================== ===========================

26 DEPRECIATION AND AMORTISATIONDepreciation on Tangible Assets 35,459,650 35,920,104Amount transferred from Revaluation Reserve (29,849) (29,849)

--------------------------------------- --------------------------------------- --------------------------------------- ---------------------------------------Total Depreciation and Amortisation 35,429,801 35,890,255

=========================== ===========================

51




`̀̀̀̀ `27 OTHER EXPENSES

MANUFACTURING EXPENSEStores, Spares and Tools Consumed 152,415,227 141,634,517Power & Fuel 161,878,393 136,705,992Processing Charges 38,352,778 26,641,206Repairs & Maintenance :

Buildings 3,867,642 5,275,557Plant & Machinery 36,977,903 30,601,075Other 4,394,006 3,602,935

--------------------------------------- --------------------------------------- --------------------------------------- ---------------------------------------Total Manufacturing Expense ( I ) 397,885,949 344,461,282

=========================== ===========================

ADMINISTRATIVE EXPENSESRent, Rates and Taxes 1,947,391 1,364,194Insurance 1,383,807 1,543,599Travelling Expenses 4,181,194 2,818,179Commission on Sale 1,141,258 1,179,872Discounts 1,378,930 3,268,471Packing Expenses 38,225,042 32,805,800Advertisement & Sales Promotion 377,667 623,745Printing & Stationary 1,597,824 1,342,466Postage & Telegram 332,224 433,023Telephone Expenses 896,633 834,087Legal & Professional Charges 3,440,166 5,132,491Membership & Subscription 141,000 105,725Charity & Donation 81,000 81,400Corporate Social Responsibility Expense 1,480,879 1,200,000Security Services 3,855,298 3,255,542Miscellaneous Expenses 577,903 453,894Loss on Sale of Fixed Assets (Net) 170,509 61,795Conveyance Expenses 749,967 686,815Warranty Claim Paid - 61,119Vehicles Running & Maintenance 1,771,566 1,807,723Freight Outward 44,891,290 37,797,830Bad Debts written-off 5,532 517,420

Auditors Remuneration :-Audit Fees 425,000 350,000Limited Review 100,000 75,000Taxation Matter - -

Director’s Sitting Fee 10,000 10,000--------------------------------------- --------------------------------------- --------------------------------------- ---------------------------------------

Total Administrative Expense ( II ) 109,162,080 97,810,190--------------------------------------- ---------------------------------------

Total Other Expenses ( I+II ) 507,048,029 442,271,472=========================== ===========================

52



28 CORPORATE SOCIAL RESPONSIBILITY ACTIVITIESa) Gross amount required to be spent by the company during the year ` 1,480,000/-b) Amount spent during the year on

i) Construction/ acquisition of any asset NILii) On purposes other than i) above 1,480,879

29 SEGMENT REPORTINGThe entire operations of the company relates to only one Segment, VIZ. Automobile Components. Hence, as per AS-17issued by ICAI, there is no reportable Segment


`̀̀̀̀ `30 FOREIGN CURRENCY TRANSACTIONS:

I. CIF Value of Imports :a) Plant & Machinery 3,397,827 12,012,300

II. Expenditure in Foreign currencya) Commission on Export Sales 1,635,038 1,179,872b) Foreign Travel (Foreign Exchange Utilized) 1,918,905 711,792c) Repair & Maint. (Plant & Mach.) 152,137 3,706,080 84,883 1,976,547

--------------------------------------- ---------------------------------------III. Earnings in Foreign Exchange

*Value of Export on F.O.B. basis 214,048,743 282,598,197

IV Dividend paid in Foreign CurrencyDetails of amount remitted during the year in foreign currency on account of dividend

No. of Non-Resident Total no. of shares Year of Amount remittedshareholders held by them Dividend (`̀̀̀̀)

2 285 2014-15 1,710


31. DEFINED BENEFIT PLANS AS PER AS-15 `̀̀̀̀ `31.1 GRATUITY

AssumptionsDiscount Rate 8% 8%Salary Escalation 6% 6%

EMPLOYEE BENEFITSDefined Contribution Plans :-The Company has recognised INR 7,32,862/- (P.Y. INR 7,78,628) as expense in Statement of Profit & Loss.

Defined Benefit Plans :-The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service getsa gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded.The following tables summarize the components of net benefit expense recognized in the Statement of Profit & Loss, thefunded status and amounts recognized in the balance sheet for the respective plans (as per Actuarial Valuation as on31st March 2016).

Table showing changes in present value of obligationPresent Value of Obligation as at beginning of Year 12,775,164 13,337,417Interest Cost 1,022,013 1,066,993Current Service Cost 727,434 701,111Benefit Paid (1,266,448) (2,434,589)Actuarial (Gain) / Loss on obligation 51,382 47,785Present Value of Obligation as at end of Year 13,309,545 12,718,717

53




`̀̀̀̀ `

Table Showing changes in the Fair Value of Plan AssetsFair Value of Plan Assets at Beginning of Year 12,722,480 12,764,732Expected Return on Plan Assets 1,067,967 1,107,165Contributions 777,805 1,243,434Benefit Paid (1,266,448) (2,434,589)Actuarial (Gain) / Loss on Plan Assets NIL NILPresent Value of Plan Assets at end of Year 13,301,804 12,680,742

Table Showing Fair Value of Plan AssetsFair Value of Plan Assets at Beginning of Year 12,722,480 12,764,732Actual Return on Plan Assets 1,067,967 1,107,165Contributions 777,805 1,243,434Benefit Paid (1,266,448) (2,434,589)Fair Value of Plan Assets at end of Year 13,301,804 12,680,742Funded Status (7,741) (37,975)Excess of Actual over estimated return on plan assets(Actual rate of return = Estimated rate of return as ARD falls on 31st March) NIL NIL

Actuarial Gain / Loss recognizedActuarial Gain / Loss on obligation (51,382) (47,785)Actuarial Gain / Loss for the year - plan assets NIL NILTotal Gain / Loss for the year 51,382 47,785Actuarial Gain / Loss recognized in the year 51,382 47,785

Net Assets / (Liability) Recognized in Balance SheetPresent value of obligations as at the end of year 13,309,545 12,718,717Fair value of plan assets as at the end of the year 13,301,804 12,680,742Fund status (7,741) (37,975)Net Assets / (Liability) Recognized in Balance Sheet (7,741) (37,975)

Expense Recognized in statement of profit and lossCurrent Service Cost 727,434 701,111Interest Cost 1,022,013 1,066,993Expected return on plan assets (1,067,967) (1,107,165)Net Actuarial (Gain) / Loss recognized in the year 51,382 47,785Expenses recognized in statement of profit and loss 732,862 708,724

31.2 LEAVE ENCASHMENTFollowing Basis were adopted for the computation of the said liabilitiesa) Mortality Table : LIC 1994-96 Ultimateb) Suitable adjustment in respect of withdrawals and other Restrictive provisions.c) Future ( expected ) payment based on terminals salary.

Determined by assuming salary rise of 6% per annum have been discounted by assuming the imputed rate of interest of8 % per annum

Numbers of Employees Actuarial Value of Leave Numbers of Actuarial Value of LeaveEncashment for 31.03.2016 Employees Encashment for 31.03.2015

217 2,451,701 192 2,162,164

54


NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2016For the Year Ended For the Year Ended

31st March, 2016 31st March, 2015`̀̀̀̀ `

32 CONTINGENT LIABILITIES AND COMMITMENTSCONTINGENT LIABILITIESa) Guarantees 800,000 1,204,500b) Bills discounted from Kotak Mahindra Bank Ltd with

recourse not due for payment 38,422,727 34,201,018c) Estimated amount of contracts remaining to be executed

on capital account and not providedTotal value of Contracts 149,148,875 148,234,575Contracts Remaining to be executed 79,780,129 105,652,779

33 RELATED PARTY DISCLOSURE AS PER (AS-18) ISSUED BY ICAI:-33.1 KEY MANAGERIAL PERSONNEL AND THEIR RELATIVES

Mr. Tarun Talwar Managing DirectorMr. Tarun Talwar (HUF) HUF of Mr. Tarun TalwarMr. Rajesh Talwar Father of Tarun TalwarMr. Sanjay Sharma DirectorMr. Vijay Kumar Sharma DirectorMr. Ankush Jindal Company SecretaryMr. Kanwar Pal Pawar CFOMs. Gita Talwar Mother of Mr. Tarun TalwarMs. Sameena Talwar Sister of Mr. Tarun TalwarMs. Shweta Talwar Wife of Mr. Tarun Talwar

Name of Person Nature of Transaction Transaction Amount Receivables / (Payables)------------------------------------------------------------------ ------------------------------------------------------------------31.03.2016 31.03.2015 31.03.2016 31.03.2015

MR. RAJESH TALWAR SALARY 3,000,000 3,000,000 - (172,476)FD RECEIVED 10,800,000 - - -UNSECURED LOANS RECD. 10,800,000UNSECURED LOANS REPAID 924,760INTT. ON FD 379,887 - -FD REPAID 3,600,000 - -

MR. TARUN TALWAR SALARY 5,256,000 3,230,000 - (199,542)

MR. TARUN TALWAR (HUF) UNSECURED LOANS RECD. 1,000,000 230,000 (230,000) (230,000)INTT. ON LOAN 98,098 16,943 - -UNSECURED LOAN REPAID 1,000,000 -FD REPAID - 467,506 - -INTT. ON FD - 59,538 - -

MR. SANJAY SHARMA SALARY 925,752 879,876 - (50,020)

MR. VIJAY KUMAR SHARMA SALARY 918,144 872,268 - (60,240)

MS. GITA TALWAR UNSECURED LOANS RECD. 21,200,000 7,200,000 (23,800,000) (23,300,000)UNSECURED LOANS REPAID 20,700,000 - - -INTT ON FD - 4,239,741 - -FD REPAID - 15,845,000 - -INTT. ON LOAN 4,164,013 455,750 - -

MS. SAMEENA TALWAR UNSECURED LOANS RECD. 1,010,000 8,355,000 (350,000) (8,355,000)UNSECURED LOANS REPAID 9,015,000 -INTT. ON FD - 527,232 - -FD REPAID - 7,596,904 - -INTT. ON LOAN 554,381 278,318SALARY 350,000 - - -

55




MS. SHWETA TALWAR UNSECURED LOANS RECD. 3,600,000 - (3,600,000) -INTT. ON LOAN 175,683FD REPAID - 55,955 - -INTT. ON FD - 7,138 - -

33.2 ENTERPRISES OVER WHICH KEY MANAGERIAL PERSONNEL AND THEIR RELATIVES HAVING SIGNIFICANTINFLUENCE


J.T.Engineering Job WorkPrivate Limited. Charges Paid 3,105,215 3,613,650 (1,137,793) (1,022,387)

34 ASSETS TAKEN ON OPERATING LEASE AS PER AS-19a) The Company has taken industrial shed on non-cancellable operating lease. Minimum lease payments of 16,50,000/

- ( P.Y. NIL) are charged to Profit & Loss during the year.b) Future commitments in respect of mimimum lease payments payable in respect of aforesaid lease entered by the

company are as follows:

Particulars As at 31.03.2016

Not later than one year 1882500

Later than one year and not later than five years 6605081.75

Later than five years 182326


`̀̀̀̀ `35 EARNING PER SHARE

Earning per Share computed in accordance withAccounting Standard (AS-20)

a) NumeratorNet profit after taxation as per Statement of Profit and Loss 33,654,936 45,487,426

b) DenominatorNo. of Shares at the beginning of the year 2,538,252 2,538,252

Total Equity shares outstanding at the end of the year 2,538,252 2,538,252

Weighted Average no of Equity shares for the year 2,538,252 2,538,252

Weighted Average of Diluted Equity shares for the year 2,538,252 2,538,252

c) Face value per Share (`) 10 10

d) Earning Per ShareBasic and Diluted (`) (Restated) 13.26 17.92

36 LICENSED AND INSTALLED CAPACITYAxles Shafts Axles Shafts

( Nos.) ( Nos.)Licensed Capacity N.A. N.A.

Installed Capacity Per Annum (As certified by the Management andrelied upon by the Auditors being a technical matter) 1,300,000 1,300,000

Actual Production 1,215,653 1,088,054

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 201637 TURNOVER, PURCHASE, OPENING AND CLOSING STOCK OF GOODS, CONSUMPTION ETC.

TURNOVER Units For the Year Ended For the Year Ended31st March, 2016 31st March, 2015

------------------------------------------------------------------------------ ------------------------------------------------------------------------------Finished Good Quantity Value Quantity Value

Axle Shafts Nos. 1,215,689 1,514,488,516 1,087,100 1,366,907,469Scrap and Others Kgs 1,506,454 26,263,212 1,303,520 16,002,536

Total 1,540,751,728 1,382,910,005

STOCKS OF GOODSOpening Stock:Axle Shafts Nos. 1,128 1,151,841 174 122,469Closing Stock:Axle Shafts Nos. 1,092 803,146 1,128 1,151,841

38 CONSUMPTION ANALYSIS38.1 CONSUMPTION OF RAW MATERIAL AND COMPONENTS:-

Units(kgs.) For the Year Ended For the Year Ended31st March, 2016 31st March, 2015

------------------------------------------------------------------------------ ------------------------------------------------------------------------------Quantity Value Quantity Value

Metallic Rods 15,953,144 690,141,150 13,827,295 626,377,009

Indigenous 100% 690,141,150 100% 626,377,009

Total 100% 690,141,150 100% 626,377,009

38.2 COMPOSITIONS OF STORES , SPARES AND TOOLS CONSUMED:-

Quantity Value Quantity Value

Indigenous 100% 152,415,227 100% 141,634,517

Total 100% 152,415,227 100% 141,634,517

39 In the opinion of the management, the value on realization of current assets, loans & advances in the ordinary course ofbusiness would not be less than the amount at which they are stated in the Balance Sheet and provisions for all knownliabilities has been made.

40 Previous year figures have been regrouped/ reclassified wherever necessary to correspond with the current yearclassification/ disclosure.

41 All amounts in the financial statements are rounded off to the nearest of Rupee, except as otherwise stated.

42 Current year figures are shown in bold prints





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talbros engineering limited · directors of the company w.e.f. 29th april, 2016. afterwards, mrs....

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